Following an air strike from the United States that killed one of Iran’s top generals, the price of bitcoin shot up by roughly $400 in mere minutes. While the crypto community has taken note of the spike, some sources are falsely reporting that bitcoin is becoming a bigger deal in Iran – so big, in fact, that it’s jumped all the way to $24,000 per unit, but this isn’t quite true.
Iran Has Seen An Increase in Crypto Action
Crypto experts are saying that this is due to a big misunderstanding involving exchange rates in Iran. Peer-to-peer trading system Local Bitcoin was allegedly pricing bitcoin units for about one billion rials amongst Iranian bitcoin sellers. This would ultimately amount to the $24,000 price mentioned earlier, but at the end of the day, this number is based strictly on the exchange rate of Iran’s central financial institution.
This is the enterprise that sets the price, and the bottom line is that it’s only ever used by government entities along with a small number of regulatory firms and businesses. For all other enterprises situated within Iran, they all have their own exchange rate – and that rate currently places bitcoin at around one third of the $24,000 price.
Crypto analyst Ali Beikverdi explains:
The official rate is what the central bank says, but literally, no one except some government organizations can get that rate while no one can use it. It’s a joke.
Having said all this, it does appear that political strife or worrisome environments can wreak havoc for bitcoin or cause its price to explode everywhere. While the $24,000 price is inaccurate, other regions have witnessed the price of bitcoin go up thanks to the strained atmospheres they’re experiencing.
In Hong Kong, for example – where the Chinese government has placed an inherent ban on bitcoin – the world’s leading cryptocurrency is trading for four percent higher than it is in the United States, while in South Korea, it’s trading at ten percent higher considering the nation has considerably stronger regulatory tactics.
Peter Schiff – chief executive of Euro Pacific Capital and known bitcoin critic – comments:
Heightened geopolitical risk has resulted in both gold and bitcoin moving higher, but for different reasons. Gold is being bought by investors as a safe haven. Bitcoin is being bought by speculators betting that investors will buy it as a safe haven.
The Sanctions Are Making Things Tough
He further states that many people in Iran have purchased bitcoin over the past 12 months as a means of avoiding newfound sanctions from the U.S. One anonymous resident of Iran explained:
With exchange offices closed, sanctions and the rial dropping like crazy, it seemed like a good idea to use bitcoin.
At press time, bitcoin is trading for approximately $7,300, suggesting there’s been no change over the past 24 hours.