The Riyal plummets to 1.4 million per 1 USD. In the Iran crisis, has Bitcoin become the country's lifeline?

Iran is currently facing a deep-rooted currency and financial crisis. On December 29, as the Iranian rial continued to plummet, many shops in Tehran’s Grand Bazaar were forced to close, and social tensions rapidly escalated. Data shows that the rial’s exchange rate against the US dollar briefly fell to a historic low of 1.4 to 1.42 million rials per dollar, causing long-term savings to rapidly diminish in a short period, prompting protests among the public.

Analysts point out that this rial collapse is not an isolated incident but the result of over 40 years of continuous currency devaluation. Since the brief conflict between Iran and Israel in June 2025, the rial has depreciated by over 40%. As the crisis spreads to the banking system, Iran’s national bank, which serves approximately 42 million customers, has also shown signs of instability, further exacerbating systemic risks.

Against this backdrop, Bitcoin has once again become a focal point of discussion. Hunter Horsley, CEO of Bitwise, stated that the situation in Iran reaffirms the original purpose of Bitcoin: to provide individuals with a store of value independent of government when national currencies fail. For ordinary citizens, Bitcoin is seen as an important tool to counteract fiat currency devaluation.

Iran’s unique advantage lies in its among the lowest electricity costs worldwide, with mining costs of about $1,300 to produce one BTC. Given Bitcoin’s current price near $87,600, the potential profit margin is enormous. However, the government considers private mining and capital outflows illegal, making Bitcoin a “underground lifeline” in Iran.

Looking ahead to 2026, as Bitcoin’s block rewards further decrease, combined with spot ETFs, institutional investments, and potential sovereign reserve demands, the market generally anticipates a new bull cycle brewing. For the Iranian people, Bitcoin represents a practical escape from the collapsing financial system; for global investors, it is an important asset allocation to hedge against fiat currency devaluation risks.