The rial hit 1.42 million per US dollar on December 29, 2025, triggering nationwide demonstrations and the resignation of the country’s Central Bank governor.
The currency crisis has pushed industry leaders to suggest Bitcoin as a protective measure for Iranians watching their savings evaporate. Bitwise CEO Hunter Horsley stated that Bitcoin represents “a new way for people to protect themselves” against economic mismanagement, as shopkeepers across Tehran shut their stores in protest.
Rial’s Catastrophic Collapse
The Iranian rial has lost over 40% of its value since June 2025, when a 12-day conflict with Israel intensified regional tensions. The currency’s decline represents a nearly 44-fold depreciation over the past decade, falling from 32,000 per dollar in 2015 to current levels above 1.4 million.
Alex Gladstein, chief strategy officer at the Human Rights Foundation, pointed out the severity of the collapse by noting the official exchange rate in the early 1980s was 70 rials per dollar. This means Iranians have watched their currency lose more than 95% of its purchasing power over ten years.
Source: @drpezeshkian
Inflation reached 42.2% in December 2025, with food prices surging 72% and medical goods climbing 50% compared to the previous year. The economic pressure has made basic necessities unaffordable for millions of Iranian families struggling to survive.
Protests Force Leadership Change
Hundreds of traders and shopkeepers rallied in Tehran’s Grand Bazaar and commercial districts on December 29-30, 2025. The merchants, who played a crucial role in the 1979 Islamic Revolution, shut their shops and chanted “Don’t be afraid, we are together” as demonstrations spread to Isfahan, Shiraz, and Mashhad.
The protests forced Central Bank Governor Mohammad Reza Farzin to resign. When he took office in 2022, the rial traded at 430,000 per dollar. His replacement, Abdolnaser Hemmati, faces the challenge of stabilizing a currency that has lost over two-thirds of its value during Farzin’s tenure.
President Masoud Pezeshkian acknowledged the government’s inability to raise wages in line with inflation. “When people are struggling with livelihoods, you cannot govern,” he told parliament, asking where the money would come from to increase public sector salaries.
Iranian Crypto Adoption Surges
Approximately 22% of Iran’s population now uses or owns cryptocurrency, representing about 10 million users. This massive adoption comes as Iranians seek alternatives to preserve their wealth against runaway inflation and currency devaluation.
Crypto outflows from Iran surged to $4.18 billion in 2024, marking a 70% increase from the previous year. The data shows Iranians are moving money out of the unstable rial and into digital assets that exist outside government control.
Nobitex, Iran’s largest crypto exchange, handles 87% of all Iranian cryptocurrency transaction volume. Despite suffering a $90 million hack in June 2025, the platform remains the primary gateway for Iranians accessing digital assets.
Crystal Intelligence research from August 2025 revealed that 1.4% of Iran’s annual GDP now flows through cryptocurrency. This demonstrates how deeply crypto has penetrated the Iranian economy as citizens search for financial stability.
Bitcoin Mining Despite Crackdowns
Iran ranks as the world’s fifth-largest Bitcoin mining operation, controlling about 4.2% of global mining power. The country’s cheap electricity costs between $0.01 and $0.05 per kilowatt-hour, making it possible to mine Bitcoin for as low as $1,300 per coin.
However, the government estimates 95% of mining operations are illegal. These underground operations consume roughly 2,000 megawatts of electricity, equivalent to what two nuclear reactors produce. Authorities have offered cash rewards to citizens who report neighbors running unauthorized mining equipment.
The crackdowns intensified in December 2024 when the Central Bank blocked all cryptocurrency-to-rial transactions. By January 2025, the government reopened these channels but only through controlled systems requiring full access to user data. In February 2025, Iran banned all cryptocurrency advertising both online and offline.
Barriers to Bitcoin Access
While Bitcoin offers a theoretical escape from currency collapse, Iranian citizens face substantial obstacles accessing it. Rules around self-custodying crypto remain unclear, and Bitcoin mining faces heavy regulation despite the country’s cost advantages.
VanEck head of research Matthew Sigel noted the government’s contradictory policies. “Iran recently cracked down on unregistered Bitcoin mining, even offering cash rewards for citizens to report their neighbors, just as demand for stores of value soared,” he explained.
International sanctions add another layer of difficulty. The US Treasury’s Office of Foreign Assets Control has intensified enforcement actions against Iranian crypto networks. Global exchanges have reduced Iranian crypto exposure by 23% between 2022 and 2024 following compliance measures.
The July 2025 freeze of 42 Iranian-linked wallets by Tether removed significant liquidity from the market. Many of these wallets had exposure to both Nobitex and IRGC-affiliated addresses previously flagged by Israeli authorities.
Iranians also suffer under widespread sanctions imposed on the theocracy for its nuclear program and support of regional militant groups. In October 2025, Ayandeh Bank, one of Iran’s largest private banks, declared bankruptcy with $5.2 billion in losses. The bank held deposits from millions of Iranians before being absorbed by the state-owned Bank Melli.
Traditional Alternatives Still Preferred
Gold coins remain the traditional safe haven for Iranians during economic crises. Gold prices reached 1.7 billion rials each on December 28, 2025, more than double their value in June. This surge reflects deep distrust in monetary policy amid sanctions, declining oil revenues, and banking sector problems.
The preference for physical gold over Bitcoin highlights practical concerns about crypto’s volatility, access restrictions, and regulatory uncertainty. While Bitcoin’s fixed supply and independence from domestic monetary policy make it appealing during currency crises, the reality for Iranians is more complex.
Larry Fink, BlackRock CEO, previously stated that Bitcoin can help those frightened by currency debasement or political instability. However, the volatility and access issues mean it serves as a hedge rather than a guaranteed solution.
Beyond Economic Theory
The Iranian rial crisis demonstrates Bitcoin’s emerging role not as a perfect alternative currency, but as evidence of collapsing trust in traditional financial systems. Similar patterns have appeared in Argentina, where citizens turned to crypto as the peso deteriorated under hyperinflation.
The coming months will test whether new central bank leadership can restore confidence in the rial or if more Iranians will turn to decentralized alternatives. With proposed tax increases for the Iranian new year beginning March 21, 2026, the pressure on ordinary citizens shows no signs of easing.
As geopolitical tensions continue and sanctions tighten, Iran’s crypto economy serves as a real-world laboratory for Bitcoin’s value proposition during monetary collapse. The results so far suggest adoption will continue growing despite government resistance and international restrictions.