Bitcoin saw a surge in price from $8,000 to $8,430 after the US initiated a drone strike on Iran top general Qaseem Soleimani on Jan 2. This prompted a response by Iran that saw two US military bases in Iraq become a target of several missile strikes. Several big names in the crypto community including Galaxy digital’s Mike Novogratz and Digital Asset Capital Asset Management’s Joshua Green agree that the BTC price surge was brought about by the tensions between Iran and the USA.
News floating around claim that Iran is becoming a haven for Bitcoin. People in Iran are reportedly scrambling to get their hands on Bitcoin, amid simmering geopolitical tensions in the region precipitated by events of the first week of January. Hadi Nemati, an Iranian digital currency specialist and Chief Operating Officer of Bitfolio capital- an open end crypto hedge fund, gave a little back story on how Bitcoin became known in Iran. He said;
“After the summer of 2019, many Iranians came to know about Bitcoin because of all the mining news and the use of electricity associated with the same which was vastly covered by various state media outlets and newspapers. Bitcoin, on a mass scale, is being seen as a speculative alternative asset and digital money.”
Nemati laid put the three sections of people in Iran who were actively using Bitcoin the most. He pointed to miners, who in his opinion were the most dominant group of users. He revealed that miners made use of BTC both on an industrial and also retail level.
The second group he mentioned was investors. He said that investors in the country were buying the flagship crypto asset for long term purposes to hedge their capital against inflation of the Iranian rial.
He went to mention active traders who operate mostly in the local crypto market at both corporate and local levels. According to Nemati this is so because Bitcoin hardly gets used for daily transactions because of a lack of infrastructure. The country’s central bank is yet to even spell out clear regulatory guidelines regarding the use of digital currencies.
Bitcoin is gaining more and more users in Iran and according to Tehran based crypto minor and investor Mahyar, it has a lot to do with local Iranians not having international bank accounts. Bitcoin enables these people to have seamless cross-border transactions done. He also believes that Bitcoin’s ability to be used by anyone regardless of social standing is another contributing factor.
It’s also not unreasonable to have a hard look at Iran’s declining fiat currency. Since sanctions by the US government were put in place in 1979 the rial has been on a downward spiral. People who live in countries that face such circumstances are very likely to look at cryptocurrencies as viable options in this era. Bitcoin at the moment is the most viable in terms of transacting and seamless cross-border transfer of value.