Oil Priced in Bitcoin (WTI/BTC)

Think of it this way

It is the cost of energy measured in the most speculative asset. When it becomes very cheap, there is surplus money; when it soars, either money is short or energy is short, and both hurt.

What is Oil Priced in Bitcoin (WTI/BTC)?

How many bitcoins a barrel of crude costs. It pits the asset that depends least on available money against the one that depends on it most: oil is moved by real supply and demand in the economy.

How to read Oil Priced in Bitcoin (WTI/BTC)

It rises when crude outperforms bitcoin; it falls when bitcoin outperforms crude. Read the slope, not the level. The Invert button shows it as BTC/WTI, which is the number of barrels one bitcoin buys. There is only data on days when both trade, and April 20, 2020 is missing: that day the barrel closed negative, and a ratio with a negative price in it means nothing.

What Oil Priced in Bitcoin (WTI/BTC) means for the market

It is the pair that has least to do with liquidity and most to do with the cycle. When this line falls sharply there is usually abundant money and cheap energy at the same time, which is the most comfortable combination for risk assets. When it rises, either crude has become more expensive —and then measured inflation is going to rise and the Fed is left with no room to make money cheaper— or bitcoin is deflating. They are not the same thing, and it pays to know which one it was.

Where the money flows

No money flows through a ratio: it is not a market, it is a division between two prices that are. What is interesting is what disappears when you divide. Both prices are in dollars, so the dollar cancels out: a stretch in which both rise because the dollar weakens leaves this line flat, even though the two series are each rising. What remains is money moving from one asset to the other, with the currency taken out.

What to watch in Oil Priced in Bitcoin (WTI/BTC)

The combination to watch is this line rising because of oil, not because of bitcoin. What follows then is measured inflation, which is what ties the Fed's hands. Check it against the Oil chart to see which of the two sides moved.

It does not measure liquidity: it crosses the price of energy with the most speculative asset.