Iranians are rapidly shifting savings into Bitcoin as the national currency spirals and civil unrest intensifies.
Protests that began on December 28, 2025, have evolved into a broad regime-change movement, met by internet blackouts and mass arrests, pushing households to seek financial lifelines outside the domestic banking system.
The move toward Bitcoin reflects both urgency and necessity as the rial loses practical value.
Currency Collapse Reaches Breaking Point
The Iranian rial has effectively ceased to function as an exchangeable currency. In open markets, one U.S. dollar now trades between 1.45 and 1.5 million rials, a dramatic collapse from roughly 42,000 rials in late 2025. The speed of the decline has outpaced previous crises, leaving wages and savings unable to keep up.
Inflation has followed the currency lower. Prices for essential food items have surged by more than 70%, while the average monthly wage has fallen to the equivalent of about $100. For many households, access to imported goods or stable purchasing power has disappeared entirely.
External pressure has compounded the shock. A renewed U.S. “maximum pressure” campaign included a 25% tariff announced on January 12, 2026, targeting any country trading with Iran. The announcement coincided with another sharp leg down in the rial, accelerating capital flight.
Bitcoin Emerges as an Exit Valve
With banks under stress and the currency failing, Iranians are increasingly taking direct custody of digital assets. On-chain data cited from Chainalysis shows a sharp spike in Bitcoin withdrawals from domestic exchanges to unattributed personal wallets between December 28, 2025, and January 8, 2026.
This behavior reflects a clear shift toward self-custody rather than speculative trading. Bitcoin is being used as a portable store of value, outside the reach of capital controls and domestic financial instability.
Iran’s crypto market was already sizable, estimated at $7.8 billion in 2025, but activity has accelerated sharply during the unrest. Beyond retail users, reports indicate that members of Iran’s leadership transferred roughly $1.5 billion via cryptocurrency to accounts in Dubai in early January 2026, underscoring the scale of capital flight.
State and Military Use of Crypto
Bitcoin’s role in Iran is not limited to civilian survival. The Islamic Revolutionary Guard Corps has also relied heavily on cryptocurrency to bypass international sanctions. In the fourth quarter of 2025, addresses linked to the IRGC accounted for more than 50% of Iran’s total crypto activity, receiving over $3 billion in value during the year.
That dual use highlights the tension surrounding crypto adoption in Iran: a tool for citizens escaping monetary collapse, and simultaneously a channel used by state actors to move capital under sanctions.
As protests continue and the rial deteriorates further, Bitcoin’s role inside Iran is shifting from alternative investment to emergency infrastructure—one of the few financial systems still functioning when the national currency no longer does.