The events unfolding in Iran are truly fascinating. On the surface, geopolitical conflicts and military tensions are drawing attention, but what really shakes Iranian people’s lives is something else entirely.

After attacks by the U.S. and Israel, asset outflows from Iran’s largest cryptocurrency exchange, Nobitex, surged by 700% within just a few minutes. A Chainalysis report also confirmed that trading volume spiked sharply during the few hours immediately after the attack. In the four days before March 2, cryptocurrencies worth about $10 million were moved out of Iran. This means that ordinary Iranians are desperately trying to shift their assets to safer places.

Looking at the root causes, Iran’s economy itself is trapped in a vicious cycle. With U.S. sanctions, inflation, and the rial’s depreciation continuing, people feel they must protect their assets. During the 2015 nuclear deal, the exchange rate was 32,000 rials per dollar, but when the U.S. reimposed sanctions in 2018, it plunged, and last year it fell to below 1 million rials. Earlier this year, it dropped to an all-time low of 1.5 million rials. In this situation, stablecoins like Bitcoin or USDT become not just speculative targets, but tools for survival.

What’s interesting is the government’s contradictory attitude. On the one hand, it tacitly allows cryptocurrencies because they help evade sanctions and secure foreign exchange. According to TRM Labs data, Iran’s Islamic Revolutionary Guard Corps (IRGC) transferred cryptocurrencies worth $3 billion since 2023, and the central bank also purchased at least $570 million worth of USDT in 2025. On the other hand, worrying about the rial’s falling value, it suddenly shut down all rial-based payment channels at exchanges in early 2025. This measure directly hit more than 10 million cryptocurrency users.

However, these regulations are producing the opposite effect. Funds are flowing into over-the-counter trading, underground trading, and even more discreet on-chain transfers. Nobitex has 11 million customers, most of whom are individual investors, and for them cryptocurrency is now an essential asset to hedge against local currency devaluation. Looking at the time in mid-2024 when Telegram’s Tap-to-Earn games (Hamster Combat and Nakoins) swept across Iran, you can see just how dire the situation is. There are reports that people in the Tehran subway were tapping their screens to receive free airdrops, and that nearly a quarter of Iran’s population participated.

The most paradoxical part is the power crisis. Iran’s power company, Tavanir, said that cryptocurrency mining consumes about 2,000MW—roughly the scale of two nuclear power plants. Even more concerning is that mining could account for 15–20% of the country’s total electricity shortage. The CEO of Tehran’s main power distribution company claimed that Iran has become the world’s 4th-largest mining hub and that more than 95% of operating mining rigs are unauthorized. Data also shows that during internet disruptions caused by the conflict with Israel, illegal mining equipment—900,000 units—was shut down, reducing power consumption by 2,400MW.

What’s even more problematic is that this mining industry is dominated by privileged groups. Religious facilities such as mosques can legally use electricity for free or at extremely low cost, so they have turned into underground mines. And heavy-industry complexes controlled by the military are exempt from power restrictions. In the end, the privileged mine Bitcoin using the country’s electricity, while ordinary citizens, suffering under high inflation, can’t even afford the electricity cost of running fans on summer nights.

Looking at Iran’s situation, it becomes clear that cryptocurrency is not just a speculative asset, but a response to a structural crisis. Faced with the realities of foreign-exchange shortages and sanctions, the government needs cryptocurrencies, and people depend on Bitcoin to protect their assets and survive. As long as geopolitical conflicts continue, it doesn’t seem likely that demand for cryptocurrencies in Iran will ever truly decline.