The Strait of Hormuz may be only 21 nautical miles wide, but it is a vital artery connecting the Persian Gulf to the global market.
With the ongoing conflict involving the United States, Israel and Iran, the narrow passage is now the ground for a final showdown.
The cost is disruption to the global energy and trade supply chain.
“The conflict in the Middle East has highlighted the Strait of Hormuz as a single point of failure when it comes to getting oil, gas and critical raw materials out of the Gulf region,” said Geraint John, vice president of research and advisory at Zero100. the street round table.
Since the war began on February 28, 2026, this corridor has been obstructed by a naval blockade and intense military activity.
With the Strait overseeing the passage of more than 20% of the world’s total oil supply, any disruption carries immediate ramifications for energy prices.
And there is no easy solution, unlike other major waterways, such as the Suez Canal or the Panama Canal, which can be avoided at a cost.
Since the outbreak of hostilities, oil prices have hovered above $100 per barrel, with occasional dips towards the $84 mark.
To put this volatility in perspective, on February 26, just two days before the first attacks, WTI crude oil was trading at $65 per barrel.
By March 6, it had risen 40% to $90. For the global economy, this represents a massive inflationary shock; For the cryptocurrency industry, the impact is even more nuanced and powerful.
Infographic with a map of the Strait of Hormuz, a vital bottleneck for global oil shipments linking the Gulf and the Gulf of Oman. Getty Images ·fake images
Related: Energy chief warns Europe only has six weeks of fuel left
While oil prices shake up traditional stock markets, they create a specific set of obstacles for digital asset miners.
Bitcoin mining is the process of using high-performance computers to solve complex mathematical puzzles to secure the network and earn rewards in the form of new coins.
To run these machines, miners need a massive and constant supply of energy.
According to the April 2025 Cambridge Digital Mining Industry Report, the Bitcoin network consumes approximately 211.58 terawatt-hours annually.
While 52.4% of the energy mix now comes from non-fossil fuel sources such as hydropower and wind, a significant 47.6% still relies on fossil fuels, primarily natural gas.
Although oil represents only 0.5% of the direct energy mix, said Chris Brendler, senior research analyst at Rosenblatt Securities. the street RoundLaw graduatemy that miners like those in Texas still rely heavily on it.
But the global oil shortage has other ways to directly impact Bitcoin mining.
The current conflict has highlighted a striking disparity in the global mining economy.
In 2025, Cambridge research revealed that it cost approximately $1,300 to mine a single Bitcoin in Iran, making it the cheapest place in the world for the industry.
Iran legalized crypto mining in 2019. Authorized operators can use subsidized electricity in exchange for selling mined BTC to the central bank.
This is due to heavily subsidized electricity rates, as low as $0.005 per kilowatt-hour.
With current Bitcoin prices near $77,596.10 at press time, Iranian miners enjoy a staggering profit margin of over 98%.
On the contrary, the situation for US-based miners has become existential. Data from CheckOnchain indicates that as of early April 2026, the average cost of mining a Bitcoin in the US had risen to between $85,000 and $90,000.
Since production costs now exceed the market price of the asset, many domestic miners are operating at net losses.
Brendler noted:
“Price is the biggest direct impact because every dollar they make is basically based on the price of Bitcoin.”
But he added that the comparison between Iran and the United States’ mining costs should be more nuanced. He noted the number of unregistered Bitcoin miners in the country.
In 2025, Akbar Hasan Beklou, CEO of the Tehran Provincial Electricity Distribution Company, noted that Iran’s heavily subsidized electricity prices made it a “paradise for illegal miners.”
However, since the war broke out on February 28, even the profit margin of Iranian mining appears to have decreased.
Iran has lost 7 EH/s hash rate quarter over quarter, according to an April report from Hashrate Index. Some have estimated that Iran previously had 9 EH/s. In that case, this is a 77% decrease in hash rate.
EH/s means Exahash per second. It is the unit used to measure Bitcoin mining power (hashrate). A “hash” is a unique computational assumption that a mining machine makes when trying to solve a Bitcoin block.
The more hashes per second a miner or a country’s collective mining capacity can produce, the more competitive they will be on the network.
The mining industry was already under immense pressure following the Bitcoin halving in 2024.
This pre-scheduled event, designed by creator Satoshi Nakamoto to control inflation, reduces the block reward given to miners by exactly 50% every four years.
While the reward was 50 BTC at launch in 2009, it fell to 3.125 BTC in 2024 and is expected to fall to 1.5625 BTC in 2028.
For a miner, the halving is a “zero hour” event. Revenue is instantly halved, while hardware and power costs remain the same.
Ahead of the 2024 event, miners could remain profitable at rates as high as $0.12 per kWh; Afterwards, that break-even point fell to approximately $0.07.
This has forced a strategic rethinking. To survive, large companies are moving away from being “pure” miners and toward a “dual engine” model, where Bitcoin mining and high-performance computing (HPC) for AI work together.
HIVE Digital Technologies (NASDAQ: HIVE) provides a roadmap for how the industry is adapting to this high-cost environment.
Unlike its competitors that rely on fossil fuel-intensive networks, HIVE has built a cost structure that is largely immune to the Hormuz crisis.
“HIVE’s entire operational footprint is powered by renewable energy, primarily hydropower.” HIVE CFO Darcy Daubaras said Round Table The Street.
“In practice, that means our electricity costs don’t change when Brent crude oil rises.”
With 440 MW operational and another 100 MW under development in Paraguay, HIVE uses contractually fixed energy costs.
Workers check crypto mining racks at a plant in Hernandarias, 350 km east of Asunción, Paraguay, on August 2, 2024.AFP via Getty Images ·AFP via Getty Images
Daubaras explained that HIVE operates a fleet at approximately 17 joules per terahash. When combined with stable renewable energy prices, the result is a cost structure that remains stable while much of the industry absorbs a sharp increase in energy costs.
“In an environment of compressed margins, that stability is a structural advantage.” he pointed out.
This energy independence, established since the company’s founding in 2017, allows HIVE to avoid the “downsizing” decisions faced by many other operators.
While miners dependent on fossil fuels are forced to shut down machines when input costs rise, HIVE’s costs remain stable.
In fact, as higher-cost operators go offline, the network difficulty adjusts, allowing efficient players to capture a greater proportion of the rewards.
Related: JPMorgan says CLARITY Act nears goal as talks progress
The most compelling reason for the industry’s shift toward AI is the revenue differential. While Bitcoin mining generates between $0.08 and $0.12 per kilowatt-hour, AI workloads can generate between $2 and $3.
“Across the industry, it is well established that AI and HPC workloads can generate three to twenty-five times more revenue per megawatt than Bitcoin mining,” Daubaras explained.
“The math is simple: at a similar power footprint, GPUs running AI workloads today produce significantly higher revenue than ASICs mining Bitcoin at the current difficulty and locking in rewards.”
The company recently reported record revenue of $93.1 million, driven by $30 million in new AI cloud contracts. However, HIVE views this as an additive strategy.
“Our response has not been to abandon Bitcoin; it has been to systematize the allocation of capital between two engines,” Daubaras said.
He clarified that HIVE is scaling AI on top of, not instead of, Bitcoin mining, using the same green infrastructure to generate dollar-denominated contracted recurring revenue.
Daubaras noted that due to the rising cost of mining a single Bitcoin, the industry is bifurcating.
“Miners with diversified contract-based income and low-cost renewable energy are moving away, while those with single-threaded income and volatile energy costs are under increasing pressure.”
Meanwhile, Brendler is clear that the network is built to last.
“There will always be Bitcoin miners. There will always be companies that can operate profitably over the long term.”
He pointed to Bitcoin’s difficulty adjustment mechanism as the critical safeguard of a self-correcting system. Automatically recalibrates mining difficulty every two weeks based on the time it takes for blocks to be produced.
As less efficient miners are forced offline due to the deteriorating economy, the network simply becomes easier to exploit for those who remain, ensuring that the most efficient operators remain profitable.
“The hash rate will always protect the most efficient miners.” Brendler pointed out.
What the current environment is producing, in his opinion, is not a collapse but a natural sacrifice.
The Iran-related hash rate drop, while significant for the region, is, in their assessment, too small to materially change the global picture.
Bitcoin, as Brendler sees it, does not break. It just becomes more efficient.
Related: Trump’s blockade order sends global oil prices above $100
This story was originally published by TheStreet on April 25, 2026, where it first appeared in the MARKETS section. Add TheStreet as a preferred source by clicking here.
