Bitcoin is becoming more valuable for Iranians amid tensions with the United States
Earlier this week, the main cryptocurrency in the market saw its value rise from around $ 8,000 to just over $ 8,430 within one hour. This latest price action came after the Iranian government decided to launch a missile attack against an Iraqi military base that housed US troops.
However, it is worth mentioning that Iran’s actions were driven by the decision of US President Donald Trump to eliminate Iranian General Qassem Soleimani – a controversial figure in the West but loved by the masses in his home country.
The total value of Bitcoin (BTC) has now risen around 15% this year, but since President Trump recently downplayed the situation in Iran at a White House press conference – saying that the Middle East power is ready to Calm down – the price of the coin slipped back below $ 8,000.
That said, a whole series of prominent figures, including Mike Novogratz of Galaxy Digital and Joshua Green of Digital Asset Capital Management, seem to agree with the notion that the aforementioned rally was definitely linked to the events that recently took place in Iraq .
It is also worth exploring the fact that the Bitcoin price increase has followed an increase in the value of other safe assets such as gold and oil. To put things in perspective, the yellow precious metal is trading near its highest levels since March 2013. Meanwhile, the price of Brent crude has risen 2.5% to around $ 70 per barrel – which could be related to the concern about the interruption of world oil distribution due to the escalation of US military tensions. and Iran.
Providing his thoughts on the matter, Mati Greenspan, the founder of QuantumEconomics.io, was quoted as saying, “The similarity between digital gold and physical material is staggering. They have basically moved in a very similar pattern for most of the year. past”.
Do Iranians really believe in the power of Bitcoin?
With all the news that has recently appeared on the Internet and that people in Iran are running to get their hands on Bitcoin, especially in the wake of recent geopolitical tensions that have been increasing in the region, Cointelegraph contacted Hadi Nemati, an Iranian digital currency specialist and chief operating officer of Bitfolio Capital – a crypto hedge fund with open capital. He noted the following:
“After the summer of 2019, many Iranians learned about Bitcoin through all the news about mining and the use of electricity associated with it that was widely covered by various media and state newspapers. Bitcoin, on a massive scale, is being seen as an alternative speculative asset and digital money. ” When asked about which section of people among the local masses is making more use of Bitcoin, Nemati said that a triple categorization can be done:
Miners: This, in Nemati’s opinion, is the most dominant group of the three – both industrial and retail. However, miners are forced to liquidate their Bitcoin holdings regularly to cover their operating costs.
Investors: These individuals, according to Nemati, are buying Bitcoin primarily for long-term investment purposes and are using the asset to cover their capital against inflation of the Iranian rial. In addition, in his opinion, although Bitcoin is not as popular as many other currencies or precious metals such as gold or silver, adoption has been steadily increasing in recent years.
Active traders: This group operates primarily in the local cryptocurrency market – corporate and retail level – because, according to Nemati, Bitcoin is rarely used for day-to-day transactions due to lack of infrastructure. Not only that, even the Central Bank of Iran has yet to issue clear regulatory guidelines regarding the use of digital currencies.
As to why Bitcoin’s popularity has increased so dramatically in Iran in the last 24 months, Cointelegraph contacted Mahyar, a cryptocurrency miner and investor based in Tehran. He noted that, since many Iranians do not have international accounts, they are able to use Bitcoin as a means to receive cross-border payments in a smooth and trouble-free way. On the subject, Mahyar added:
“People send bits to a currency exchange and receive cash. Most of the bits also come from mining farms, and dollar revenues are very important to people. I think big companies also do their best for avoid taxes. “
Another reason he believes that Bitcoin’s popularity has increased so much in recent years is because of the benefits of anonymity that most cryptocurrencies bring. Not only that: Due to the fact that Bitcoin can be used by anyone, regardless of their financial background, more and more people are willing to make use of this novel asset class.
On the issue of whether there are currently easy conversion paths for people to liquidate their Bitcoin holdings, Mahyar told Cointelegraph that there are many people who are willing to facilitate peer exchanges because they believe that Bitcoin is destined for great things in the future. next. In addition, he also stressed that more traditional media, such as LocalBitcoins, are quite popular among the masses.
Iran’s relationship with cryptocurrencies seems to be constantly evolving
Since the US government imposed severe economic sanctions in 1979, the value of the Iranian rial has been steadily decreasing, and the fall became especially evident in the 2000s. As a result, many Iranians have tried to find novel ways to transfer their wealth to different value reserves, including other fiat currencies, precious metals, etc.
In addition, many rich Iranians have taken refuge in banks based in Dubai and other friendly countries in the Middle East. However, with inflation constantly rising, the rial has faced a major devaluation, especially after President Trump restored certain economic sanctions against the Islamic nation last year.
To deepen this issue, Cointelegraph spoke with Jeremy Joo, general director of Unicoindcx and a member of the Blockchain conglomerate of Malaysia, G1. Joo frequently deals with startups and cryptocurrency companies located in and around Iran, and in his personal opinion, many Iranians who until now did not have the means or the volume to move their money out of the country have started turning to Bitcoin at a rate fast – especially the younger generation. He added:
“The younger population began to carry out small mining operations. Electricity costs are almost nil in Iran and in 2017, customs were not familiar with mining machines, so many entered the country – especially the S9 and other equivalents. At the end of 2018, the government is finally aware of these mining machines, which has made their prices rise. However, this has not deterred the masses. “
Joo also aligned with Mahyar’s stance that a number of Iranian cryptocurrency miners and holders are currently using LocalBitcoins, as well as a number of local groups for OTC sales – which have strong connections abroad – to facilitate their cryptocurrency transactions in a non-commercial way.
Joo also noted that although there are small groups of cryptocurrency traders in the country, the Iranians are not known for their knowledge of the financial market, but rather for their engineering skills – which stands out for the fact that the Most of these same merchants are also involved in some type of mining activity of Ether or Bitcoin. Joo added:
“The Iranians use cryptocurrencies as a store of value – much like Venezuela, where their currency has been rapidly devalued. In addition, no merchant openly accepts Bitcoin payments in Iran and electronic wallets do not exist.”
Linked to cryptocurrencies
Political opinions aside, Iran’s sad reality is that, since the 1979 revolution, the country has had to face endless economic sanctions, as well as other destabilizing issues, such as the constant devaluation of the currency and high inflation
People living in countries like Iran, who face constant economic and social turmoil, are required to resort to cryptocurrencies at some time to safeguard their assets, especially because digital currencies cannot be controlled or manipulated by governments or any other centralized financial / banking institution.
In this regard, younger people – especially those with international exposure – seem to be jumping in the cryptocurrency car at an extremely fast pace, simply because cryptocurrencies seem to be a better option when compared to the sovereign currency of the nation. .
Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.