This weekend, U.S. President Donald Trump confirmed that Nicolás Maduro of Venezuela was taken into custody, with the U.S. set to control its oil production. Such developments have ignited conversations in the cryptocurrency community, particularly with Arthur Hayes, the BitMEX co-founder, stating that lower energy costs could bolster Bitcoin’s value due to enhanced credit conditions.

“Cheaper oil could lead to monetary expansion, which generally raises the price of Bitcoin,” said Hayes.

The events unfolded on January 3, leading to a swift reaction in the markets, where Bitcoin initially dipped from nearly $91,000 down to about $89,000 but then surged back up to $92,000 within a day.

Hayes emphasizes that with the U.S. controlling Venezuelan oil, there could be less pressure to limit monetary expansion, arguing that this would likely support Bitcoin prices. He presents his findings in his “USD Liquidity Conditions Index,” asserting a notable correlation between increased liquidity from money printing and Bitcoin’s ascent.

Key Takeaways

• Bitcoin tends to react positively to expansive monetary policies.

• The relationship between oil prices and Bitcoin is growing tighter, with recent events potentially shifting market dynamics.

• As of now, Bitcoin’s price continues to hover around $92,000 amidst a turbulent geopolitical background.