If we put our glance on the global energy markets we can see the market of oil is in disarray. Russia, a top oil producing country, and Saudi Arabia are puzzled about what they should do whether to abate production to accommodate the slowdown or bury the U.S. shale market by making it too expensive to support. There is a vise-versa relationship between the price of oil and dollar but it is being happened presently in time of coronavirus crisis. Russia, China and Iran have been the most active nations in exploring cryptocurrency space from the very early age.
The current sensibility of crypto fans of Russia and China is evidently defiance. Big crypto mining pools are rejecting Iranian miners just due to sanctions. On the other corner, it’s a rumor that Iranian is trying to use cryptocurrency to circumnavigate sanctions possibly with deals related to commodities or oil markets. Verily to say that, crypto-savvy alliance of China, Russia and Iran is growing impatient with the U.S. sanctions.
The oil supply route of Saudi Arabia has been criticized and the kingdom’s hold on the shipping routes around Yemen began falling. China is trying to keep its own currency more or less stable selling dollars quite liberally and because of that reason the dollar has enfeebled. It is thought that this tactic of China being a part in the energy market is creating tensions between Saudi Arabia and Russia. China and Russia are trying to move away from the petro-dollar contracts.
Can Bitcoin occupy the place of dollar?
In this critical and questioned situation, using bitcoin (BTC), the current price of which is $7,900, can be option instead of U.S. dollars. But several factors beyond banking sanctions lag it behind. Bitcoin is the least correlated asset on the global economic chessboard. The market risk related to bitcoin can potentially be increased due to market situation. Bitcoin is prone to be affected as like as gold and dollar if it is considered to be a store of value asset class. But most OPEC players see bitcoin as a sanction play.
What role cryptocurrency will play in the future markets is questionable as there are questions regarding global sanction rivalry, compliance on the tangible end of any significant trade instead of the payment rails themselves. About oil market rivalry it can be said that everyone is waiting to see the impact and it’s about who can hold their breath the longest. Reportedly incumbents are satisfied about the dominance of U.S. dollar in oil markets.