decrypt.co
Oil manufacturers could sure use a difficulty adjustment right about now.
If that comment makes no sense, you might want to read up on #Bitcoin.
— Preston Pysh (@PrestonPysh) April 20, 2020
First everyone in crypto became coronavirus experts. Then stock market and financial policy experts. Now crypto experts are chiming in on the oil crash, where a once thriving and essential commodity turned negative.
Here’s what some experts in crypto have said:
End the War in Iraq?
Anthony Pompliano of Morgan Creek Capital has been loquacious as usual. On Twitter, he asked his audience to ponder whether the US should end the US war in Iraq as oil prices plummeted:
If oil prices are negative, does that mean we can end the war in Iraq now?
— Pomp 🌪 (@APompliano) April 20, 2020
Some people replied with answers like:
live view US leaving the middle east pic.twitter.com/aJAJYBBOGo
— Derp (@chrisharveyca) April 20, 2020
pic.twitter.com/12F54bjeBk
— VladdyDaddy (@organictrade1) April 20, 2020
Commodity traders: Bitcoin is worthless, it’s gonna go to zero.
Bitcoin: pic.twitter.com/PdsvzOmEKK
— puddinghead (@sir_puddinghead) April 20, 2020
Effects on commodities and global trade
Bull Bitcoin’s and Canada’s foremost “Toxic Bitcoin Maximalist,” Francis Pouliot, took aim at his home country about how it could have profited from past oil prices with Bitcoin. Canada’s Western Select Oil (WCS) was trading at -$29.75 at the time of his tweets.
Finally, there is no longer any price difference between WTI and Canadian WCS crude oil!
Both are trading equally at -30$ per barrel 🤣
Honestly, I understand the theory but I don't even know how that works from a trading or logistical point of view LMAO clown world!! 🤡 😂 pic.twitter.com/YgwovT4o3i
— Frλ͎ncis Pouliot ☣️ (@francispouliot_) April 20, 2020
Selling Western Select Crude for Bitcoin 5 years ago and buying it back today you would have increased crude oil inventory by 124900%.
Imagine if an oil refinery had done this.
— Frλ͎ncis Pouliot ☣️ (@francispouliot_) April 20, 2020
As for other macro effects on commodities and trade, Real Vision’s CEO Raoul Pal continued touting his bullish case for Bitcoin. Pal said he doesn’t see any other way “the dollar doesn’t explode higher and US rates don’t go negative,” meaning deflation for commodities and inflation for the foreign fiat currencies competing against the world’s reserve currency.
I know its not a popular view, but I don't see any way that the dollar doesn't explode higher and US rates don't go negative...I think they go hand in hand and it's coming soon..
Yes, and Im still bullish bitcoin and gold. Also not mutually exclusive.
— Raoul Pal (@RaoulGMI) April 21, 2020
Pal speculated that the drop in oil would have catastrophic effects on the prices of corn, soy beans, sugar, and raw industrial materials—a deflationary scenario “where the US farmer is sadly going to be driven to bankruptcy” from high debts and deflation.
Oil is deflationary. Soft commodities look like they are going to follow suit and the US farmer is sadly going to be driven into bankruptcy, just like the shale patch...
1/
— Raoul Pal (@RaoulGMI) April 21, 2020
https://twitter.com/RaoulGMI/status/1252396843851382786?s=20
Coin Metrics’ Nic Carter posted a chart from the World Bank on Twitter, which ranked countries that rely on fuel exports as a large percentage of their exported merchandise. The list was led by Angola, Brunei, Nigeria, and Azerbaijan, and sprinkled in with some Latin American, African, European, and Middle Eastern countries.
Carter pondered whether these countries could risk “sovereign defaults” from their reliance on oil exports, which could mean the death of their native fiat if they rely on US dollars from oil revenues:
On a serious note is there a risk of sovereign defaults from nations that rely heavily on oil exports? Here's 2018 data for heavily exposed countries
h/t @timpastoor for the idea pic.twitter.com/wisWVDkrft
— nic carter (@nic__carter) April 20, 2020
Bloomberg’s Joe Weisenthal summed up what this means for oil exporting countries whose vaults may be low on US dollars:
It's crazy how costly it's gotten to acquire USD.
To get $100, you have to sell 8 barrels of oil.
Back in February you only had to sell 2 barrels.
— Joe Weisenthal (@TheStalwart) April 20, 2020
The effects on Bitcoin mining and Crypto markets
Bull Bitcoin CEO, and Canada’s foremost “toxic Bitcoin maximalist, Francis Pouliot, called to “Make Venezuela Great Again” by mining Bitcoin with their cheap oil and gas.
MAKE VENEZUELA GREAT AGAIN
with Bitcoin mining on cheap oil/gasAmarite or amarite?
— Frλ͎ncis Pouliot ☣️ (@francispouliot_) April 21, 2020
Pouliot also tweeted a thread at Alberta’s Premier Jason Kenney, the head of province in Canada under major strain as a top oil producer and exporter. In the thread, Pouliot asked the author of The Bitcoin Standard, Saifedean Ammous, to show how government’s “could encourage [Bitcoin] mining to reduce trade deficits in case of Hyperbitcoinization.”
Hello @jkenney https://t.co/gSfp7hHgWy
— Frλ͎ncis Pouliot ☣️ (@francispouliot_) April 20, 2020
(On a side note, Pouliot also posted a funny video set to Pink Floyd’s song “Money,” showing how Canadians can use their government-granted emergency funds to buy Bitcoin.)
MONEY 🚁 pic.twitter.com/MeXKpMX2ES
— Frλ͎ncis Pouliot ☣️ (@francispouliot_) April 21, 2020
$2000 gives you nearly 21,000,000 sats
Jesus you da real MVP https://t.co/qYXPBgrNoN pic.twitter.com/YPpgu9ke9M
— Frλ͎ncis Pouliot ☣️ (@francispouliot_) April 21, 2020
As for Stablecoins, Coin Metrics’ Nic Carter pointed to data which showed the market had eclipsed $9 billion dollars.
Stablecoins over $9b now. They've tacked on $3b in the last six weeks https://t.co/C2soDgiciN
— nic carter (@nic__carter) April 20, 2020
In that thread, Carter answered questions from readers about why stablecoins are surging, and what the uses might be. He said that some investors in emerging markets are using stablecoins alone, as opposed to real fiat currencies in banks, for “normal working capital purposes,” meaning for liquidity. Strong fiat currencies such as US dollars and Euros might be difficult to access abroad amid the drop of oil revenues.
He also alluded to how these investors don’t need a traditional on-ramp for stablecoins, but use crypto instead. “You don’t need to redeem a stablecoin with the issuer to use it as money,” he added.
anecdotally I've heard a lot of it is for non-bank dollar-equivalents in EM for normal working capital purposes. not all dry powder for crypto.
— nic carter (@nic__carter) April 20, 2020
you dont need an onramp. you use crypto liquidity. you don't need to redeem a stablecoin with the issuer to use it as money.
— nic carter (@nic__carter) April 20, 2020
Last month, Carter spoke to Decrypt about how the financial crisis around the world from CoronaVirus, and the world governments’ brrr brrr (money printing), may have caused the stablecoins pump.
Over at crypto data analytics firm Messari—a platform that displays the price movements of oil, the S&P 500, Bitcoin, alongside covid data—founder Ryan Selkis retweeted Pal’s take on commodities dropping with oil and asked how people still don’t think there’s “a major currency failure.”
Oh and “buy bitcoin.”
oil is negative and you still think we won't have major currency failures?
buy bitcoin.
— Ryan Selkis (@twobitidiot) April 20, 2020
Nonetheless some Bitcoin critics, aka gold bug Peter Schiff, aren’t so bullish amid the oil crisis:
Oil is like garbage. You have to pay the garbage man to come collect your garbage. Now, if you have oil, you've got to pay somebody to get rid of it. https://t.co/VKTG0TCOEI
— Peter Schiff (@PeterSchiff) April 21, 2020
Other crypto twitter experts also weighed in:
So as @RaoulGMI continues to nail every call - oil being the latest - when do people start front running his “#Bitcoin 50-100x” prediction?
— Trey (@TreyStewart14) April 21, 2020
After today, oil can no longer be considered a reliable store of value. Your next best options are the U.S. dollar (gulp), gold (scarce), or Bitcoin (fixed).
— Cameron Winklevoss (@winklevoss) April 20, 2020
Negative price of oil reflects a lack of demand coupled with a lack of physical storage (and a complicated delivery process). Yet another advantage of virtual commodities like Bitcoin.
— Cameron Winklevoss (@winklevoss) April 21, 2020
Bitcoin mining arb: "purchase" oil to power miners.
— Cameron Winklevoss (@winklevoss) April 21, 2020
Proof of storage is the new work function for the oil industry.
— Tyler Winklevoss (@tylerwinklevoss) April 21, 2020
#bitcoin priced in oil
- Follows stock-to-flow perfectly
- 1 BTC ~ 600 barrels of oil pic.twitter.com/Wsxn4ZhmYU— PlanB (@100trillionUSD) April 20, 2020
Bitcoin: "I like to move up and down 5% every day for no apparent reason"
Oil: "Hold my beer"
— Barry Silbert (@barrysilbert) April 20, 2020
Remember when Bitcoin was a risky investment?
Good times.#Oil— Alistair Milne (@alistairmilne) April 20, 2020
WHY ARE gold, silver Bitcoin dropping in price. MANY REASONS. One is crash in oil. Real reason LIQUIDITY SQUEEZE Shortage of FAKE $ forcing sale of LIQUID REAL ASSETS gold, silver, Bitcoin for FAKE $. Buying opportunity if you can find REAL gold,silver&Bitcoin.
— therealkiyosaki (@theRealKiyosaki) April 21, 2020
“Bitcoiners are crazy for trusting Satoshi Nakamoto!”
- misinformed oil bag holder who IRL trusts Vladimir Putin and Mohammad Bin Salman Al Saud
rekt
Run a full #bitcoin node, don’t trust, verify!
— Pierrrrrrrrrrrrre Rrrrrrrrrrrrocharrrrrrrrrrrrrrrd (@pierre_rochard) April 20, 2020
If USD is a petrodollar
And oil trades at zero
🤔
🤔
🤔
Buy #bitcoin— Katie Ananina 🏴 (@KatieAnanina) April 20, 2020