The increasing tension in Iran, after the assassination of Qasem Soleimani, has caused Iranian rials to lose even more confidence.
Currently, it can be seen that Bitcoin has resumed the bullish expectation for the short term after the bulls involved a slight bearish attempt.
This positive situation occurred immediately after the announcement of the death of the Commander of the Islamic Revolutionary Guard, an event that is increasing tension in Iran and, consequently, the country’s economic uncertainty.
After those events, institutional investors have increased their positions on gold and silver. As Iran is an important participant in the oil market, black gold has also increased its price by more than 4% in a few hours.
However, traditional markets have not been the only beneficiaries. Bitcoin and the main altcoins have also had a positive moment; thus, demonstrating the progress of some cryptocurrencies to safeguard value.
Iranians Pay over USD 25,000 for Bitcoin
Major investors are not the ones inflating Bitcoin’s price in Iranian rials but desperate people that try to protect themselves from the possibility of an economic debacle in the country. Bitcoin’s best qualities over other refuge values are being considered to be a determining factor in this situation.
LocalBitcoins Iran users have been offering more than 1 billion Iranian rials per Bitcoin, equivalent to almost USD 24,000. This price is higher than its all-time maximum, even though its real price is around USD 7,325.
The largest current offer for BTC is 1,069,172,000 Iranian rials, equivalent to 25,437 US dollars.
Bitcoin’s Price Increase Diverges with Transaction Volume
Despite the volatile devaluation of the Iranian rial against Bitcoin, the volume of transactions has decreased to the point that it touched a low of several months.
This situation is most likely linked to the restriction of the Internet by the Iranian government, which is a measure taken amid strong protests in November 2019, which respond to a fierce increase in the price of fossil fuel.
Tension Increases as Hours Elapse
Whilst the United States of America is trying to calm the waters, Iran promised to take revenge for the actions that have occurred.
Philip Gordon, who was coordinator of the White House for the Middle East and the Persian Gulf during the Barack Obama administration, states that this action is little less than a declaration of war.
However, US President Donald Trump believes that the situation has been misunderstood. He stated that he intends to stop a war rather than start one.
Ali Jamenei, supreme leader of Iran, said that those that stained their hands with the blood of General Soleimani and other martyrs in the attack must expect an act of hard revenge.
Such a negative situation for Iranians would lead them to continue seeing the devaluation of their currency, and an increase in the price of traditional refuge values, oil and cryptocurrencies.
The decentralization offered by blockchain technology has already been supported by Iranian President Hassan Rouhani. He recently announced the proposal of a Muslim cryptocurrency that will eliminate the dominance imposed by the US financial system.
However, the crypto market remains at a disadvantage among Iranians, since the regime has offered rewards to those who denounce unauthorized cryptographic operations.
By Alexander Salazar
