Following President Donald Trump’s announcement that the US would pull out of the Iran nuclear deal, the Iranian rial crashed from $0.00003 to $0.00002, or 50,000 rials to the dollar. Will this cause Iranians to turn to Bitcoin and other cryptocurrencies?
Fleeing to Crypto
Iran’s economic hardship heightened by sanctions and the US withdrawal from the nuclear deal will cause Iranians to buy more cryptocurrencies, said Weiss Cryptocurrency Ratings analyst Juan Villaverde in a blog post today.
Millions of Iranians are panicking. They fear not only renewed sanctions but also economic collapse and financial repression. Many more are scrambling to find safe refuge for the little money they have left.
Iranians have already spent more than $2.5 billion on cryptocurrencies, the Iranian Parliament’s Economic Commission told local media earlier this month. Villaverde said this pivot to crypto is only the beginning.
In a statement made to Bitcoinist via e-mail, Villaverde said:
You can expect the same to happen — in much bigger amounts — in the wake of any banking or monetary crisis in the future.
He further added:
In the past, when corrupt governments devalued their local currency or seized assets from citizens, investors ran to the US dollar or gold. […] Today, many are moving into cryptocurrencies, where their money sits on a global distributed ledger that no central bank or government can touch.