Western Bitcoin markets have picked up a little bit this week, but nothing like Iran, where uncertainty about the future is certainly soaring.
The price of Bitcoin in Iranian markets – which are officially illegal in the country – has spiked to $24,000 per unit. In a way.
1 Billion to 1
Traders on LocalBitcoins are asking at least 1 billion Iranian Rial per BTC. At the current official exchange rate of about 42,000 Rial per dollar, that makes the price of an Iranian Bitcoin about $24,000.
LocalBitcoins has apparently reversed its decision to ban Iranian users.
The rate is apparently only for those looking to pay with Rial, and isn’t quite accurate in dollar terms. Dollar markets, where Iranians use foreign financial services to conduct transactions, are much more in line with global rates. At time of writing, BTC was going for about $8,100.
Valuing the cryptocurrency at this price would be based on the “official” exchange rate, which is different than the rate a rial is worth on the streets of Iran. Official rates are typically used only in external trade, which is also the purpose of Iran’s blockchain project.
Internally, no one will pay $1 for 42,000 rial. They’ll more likely pay $1 for 140,000 or so, according to a source speaking to CoinTelegraph.
What the Bitcoin price disparity actually shows us, therefore, is a steep divorce between the official Iranian Rial rate and the rate used by Iranians.
This reporter has spoken with an individual in nearby Syria who says that he routinely pays a 10-20% premium in order to get cryptocurrency for online gambling.
The source also noted that other cryptocurrencies such as Monero and Ethereum are routinely trafficked in the region.
A Little War Goes A Long Way
Iran has been embroiled in a global stage play with US President Donald Trump, who ordered the killing of one of its top generals this week. The heroic figure’s passing has resulted in protests and mourning in the streets of Tehran, with many Iranian’s demanding that the country respond to the US in kind.
An Iranian cleric named Shahab Moradi says it will be hard for Iran to do this, since US citizens don’t glorify their government servants in quite the same way as Iranians do. In short, there’s no equivalent to a General Soleimani in the US.
War is both good and bad for currency prices. Typically, the winning country sees a benefit, while the losing one eventually currency goes out of existence.
During the invasion of Iraq, the value of a Dinar dropped to a fraction of a penny. Today, an Iraqi Dinar is worth about $0.00083. At one point in the 1980s, an Iraqi Dinar was worth over $3.
Iran’s Rial is already in the bucket, with it taking roughly 140,000 of the Islamic Republic’s units to buy $1. Officially speaking, the currency is worth almost three times that amount, but it would not be able to buy that level of goods.
Iran was among the first countries to establish its own blockchain, but not much is known about its current status. Reportedly, it will use the distributed ledger to settle international remittances at the national level.
Bitcoin and other cryptocurrencies are currently banned in Iran due to religious standards about money.