Earlier this month on the 20th of April, the United States oil futures contracts for May delivery slipped due to storage problems. The price of oil quickly fell below zero and what followed was a significant round of FUD in the market as well as other commodities. When it comes to bitcoin, the digital asset has an uncorrelated nature with oil but the crypto market didn’t go to any unfavorable movements. But when it comes to bitcoin mining, the price of oil could be good news…
With the significant drop in the price of oil, many oil producers wanted people to buy into the assets however, there were many shipping containers for oil that remained unused.
This led to significant availability for oil which put the price down to a very low level. With the price of the assets suddenly plummeting, many are discussing the potential that it could have a positive impact on bitcoin mining. It all stemmed from words from Andreas Antonopoulos, a well-known bitcoin advocate, and analyst.
Speaking in a recent ask me anything a session, Antonopoulos said the following:
“If you are connected to a coal fired power plant and somewhere else, a gas fired or oil fired power plant has half the cost of energy, because its oil is much cheaper, it’s going to cost less to get electricity from your coal plant, surprisingly enough, because they’re going to have to compete and operates with the loss, at least temporarily.”
What is highlighted by AMB Crypto, The price of electricity will drop internationally as a result of the crash due to the fundamental principle behind distribution of electricity.
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