Civil unrest erupted in Iran as protesters took to the streets to express their anger over the government’s decision to ration gas and increase price by at least 50 percent. The move came after U.S. sanctions limited the flow of petrodollars, forcing the oil-rich nation to reduce subsidies. Financial Times reported that Iranians received news on Friday that each motorist would be limited to 60 liters of fuel per month. Motorists can still get extra fuel, but they have to pay double the amount.
To show their disappointment, many Iranians left their cars on the road and blocked Tehran’s major highways. Some protesters burned down banks, government buildings, and gas stations. In the footage, one can see that citizens were burning down the country’s central bank.
Amidst the demonstrations and turmoil, citizens who own bitcoin have put themselves in a position to protect their wealth. Those who have yet to store their wealth in the No. 1 cryptocurrency will likely do so once some semblance of stability is restored.
News of security forces gunning down protesters in the middle of the street are circulating on Twitter. This is but one of the many clips that reveal the intensity of the uprising.
In an effort to contain the news, the Iranian government shut down the internet in the entire country. NetBlocks reported that internet connectivity is only at 7 percent of its usual level as the regime struggles to control the uprising.
This is bad news for citizens, businesses, and for many other reasons. It’s also bad for bitcoin miners in the country. All of a sudden, their operations are halted. Depending on the extensiveness of the internet blackout, Iranian miners might be forced to sell their bitcoin holdings as soon as possible to pay for the possible losses. On the flip side, they just might hold onto their coins.
In addition to switching off the internet, Tehran is also keeping citizens from fleeing to neighboring Iraq. At the request of the regime, Iraq closed the border that connected it with Iran. Now civilians have little recourse but to weather the storm. In the midst of brewing conditions, bitcoin’s store of value proposition should entice Iranians.
This is something that Hong Kong protesters understood. In June, the volume of peer-to-peer Hong Kong-based bitcoin exchange CoinDance suddenly spiked as protests erupted. The volume hit an all-time high in October as demonstrations escalated.
The situation in Iran is much more dire than in Hong Kong. Violence, road blockages, and lack of internet access are putting citizens between a rock and a hard place. Thus, I expect multitudes of Iranians to buy bitcoin as soon as internet connectivity is restored. The current upheaval highlights the need for a safe and portable store of value.
Iranians can opt out of the financial system while protecting their wealth at the same time by buying bitcoin. By owning the dominant cryptocurrency, they’ll have the means to flee the country once the opportunity presents itself. These benefits should outweigh the risks of volatility posed by the No. 1 cryptocurrency.
Therefore, it is possible that Iranians would trigger bitcoin’s next leg up. This is especially possible when internet connectivity is restored.
Disclaimer: The above should not be considered trading advice from CCN.com. The writer owns bitcoin and other cryptocurrencies. He holds investment positions in the coins but does not engage in short-term or day-trading.
Last modified: August 10, 2020 5:15 PM UTC