Over the weekend, the US launched a military operation in Venezuela, and President Nicolas Maduro and his wife were brought to the US.
This situation alarmed the entire world, and an investigation was launched in the US against Nicolas Maduro on charges of drug trafficking and arms possession.
The US operation in Venezuela is affecting not only the economic and political environment but also the cryptocurrency sector.
An analysis suggests that if US companies gain access to and begin using Venezuela’s vast oil reserves, Bitcoin (BTC) mining could become cheaper.
According to Bitfinex analysts, if Venezuela gains access to its oil reserves, the electricity costs for the Bitcoin mining sector could decrease, becoming cheaper and increasing mining profitability.
“If US companies begin developing Venezuela’s vast oil reserves, it would mean cheaper and more abundant energy. This would create an immediate ripple effect in the energy market and could secondarily impact Bitcoin and the broader cryptocurrency market.”
Venezuela possesses one of the world’s largest oil reserves, approximately 303 billion barrels, and among US companies, only Chevron currently conducts limited operations in the country. President Donald Trump, however, wants other major US energy companies to enter Venezuela.
More companies entering the country and gaining access to its oil reserves could provide much-needed relief for Bitcoin miners, whose profitability has been declining due to Bitcoin’s 25% drop from its all-time high, increased mining difficulty, and rising electricity costs.
Bitfinex analysts said that oil reserves could affect Bitcoin and the crypto sector, but crypto prices are more likely to be influenced by macro risk appetite and volatility than by energy fundamentals. The analysts added that the impact of Venezuela and the oil factor on the cryptocurrency sector should be interpreted from a medium- to long-term perspective.
*This is not investment advice.
