When currency fails: Why Iranians are turning to Bitcoin

The winter streets of Tehran bear witness to a silent economic crisis. As the rial plummeted to a historic low of 1.4 million per US dollar this week, Iranians’ lives are changing rapidly. Merchants are shuttering their doors, the banking system is on the brink of collapse, and the central bank governor has resigned amid the crisis. This is not just a currency crisis but a profound revelation of the fragility of the entire fiat currency system.

Forty Years of Devaluation Nightmare

The current predicament of the rial did not happen overnight. Over the past forty years, this currency has experienced a continuous cycle of devaluation. Starting from the brief conflict with Israel in June 2025, the rial lost over 40% of its value within just a few months.

Today, the once-viable rial has become a digital game—exchanging at 1.4 million per US dollar. For Iranians relying on savings for their livelihood, this is almost equivalent to a complete wealth wipeout. The banking system’s crisis is an additional blow: Bank Melli absorbed a failed bank last October, and now it shows signs of instability itself. This institution holds the trust and assets of 42 million Iranians, and the risk level is evident.

Bitcoin Gold Rush Under Power Advantage

Amid the collapse of traditional financial systems, Iran possesses one of the world’s cheapest electricity resources. This creates a unique opportunity: mining one Bitcoin costs only about $1,300, while the current Bitcoin price has surged to around $91,840 (as of January 12, 2026), with a profit per coin exceeding $90,000.

What does this mean for Iranians seeking asset hedges? It means that while the official currency continues to devalue, they can create a hard asset of global consensus value through Bitcoin mining. Bitcoin is not controlled by any single country, and its value crosses borders—this is the lifeline for locals when fiat currency fails.

However, authorities have labeled this survival route as criminal activity, further pushing Iranians into the underground economy.

Hunter Horsley’s Perspective from Bitwise

Hunter Horsley, CEO of the global asset management firm Bitwise, commented on this crisis, touching on Bitcoin’s core value proposition:

“Poor economic management—this has been a theme through the past, present, and future. Bitcoin offers a new way for people to protect themselves.”

This statement is not an abstract theory for Iranians but a tangible reality. When the government cannot provide stable currency, and the banking system is teetering, decentralized digital assets become the defensive line.

Macro Opportunities in 2026

Looking at the bigger picture, 2026 will be a pivotal year for the Bitcoin market. Although 2025 is filled with US-China trade tensions and liquidity pressures, next year, the reduction in new Bitcoin issuance will resonate strongly with continued purchases by institutional investors—including ETFs and sovereign funds.

This macroeconomic tailwind is meaningful for both Iranians and global investors—Iranians desperately seek to counteract fiat devaluation through exports, while global investors look for tools to combat the cycle of worldwide inflation. Whether Bitcoin can break through the predicted target range of $170,000 to $250,000 depends on whether these macro factors can sustain.

Epilogue

The process of the rial falling from 70 to 1 USD to 1.4 million to 1 USD is a story of lost trust. For Iranians, this crisis painfully illustrates why Bitcoin is necessary: when the official monetary system fails, people need an alternative. For the global market, Iran’s plight is becoming the most compelling case for Bitcoin’s existence—it is no longer just a hype topic but a practical application in extreme scenarios.