Bitcoin for oil? Venezuela, Russia could ramp up efforts to dethrone the dollar

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Bitcoin physical tokens sit next to a collection of U.S. dollar bills in this arranged photograph on 01 November 2017, in Hong Kong, China.

Bitcoin mania could prove to be the flashpoint for some of the world’s largest oil producing countries to make a major move against the dollar, according to one commodity analyst.

The world’s most popular cryptocurrency has skyrocketed in recent months, soaring above $19,000 on Thursday on the Coinbase exchange, before notching a huge decrease. Such wild price swings have prompted some of the world’s biggest banks to denounce bitcoin as a fraud, warning investors of a speculative bubble doomed to fail.

However, at the start of the month, U.S. regulators gave the green light for two of the world’s largest futures exchanges to list bitcoin futures. Futures are derivatives, or financial instruments, that obligate a trader to either buy or sell an asset at a specified time and at a specified price. The announcement was viewed by some observers as a vote of confidence for the digital currency’s legitimacy.

“This should bolster the increasing popularity of cryptocurrencies; so much so that they may pose a threat to the role of the U.S. dollar as the world’s reserve currency,” Stephen Brennock, oil analyst at PVM Oil Associates, said in a research note on Friday.