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Did Bitcoin prove to be a safe haven during the US-Iran crisis?
Did Bitcoin prove to be a safe haven during the US-Iran crisis?
Bitcoin

Did Bitcoin prove to be a safe haven during the US-Iran crisis?

By Giorgi Mikhelidze - 26 Jan 2020

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At the beginning of January, there was a serious political crisis between the US and Iran and, in the same period, the search results for “Bitcoin Iran” rose by a significant amount.

In fact, things got quite heated when the first shots were fired after the assassination of General Qasem Soleimani. However, despite the political crisis the Rial/USD pair was not affected too much. At least it didn’t change too much in comparison to how it was doing in the past. But, one thing did change considerably during that time period.

This led search results for “Bitcoin Iran” to rise by a significant amount, followed up by the appreciation of Bitcoin itself. The coin managed to jump from around $7,500 to $8,300 within a couple of days. Although this seems like nothing compared to how much the coin was changing during 2017 or Summer 2019, it’s still an important change of pace.

Did the Iran/US crisis affect Bitcoin?

Some experts disagree that Bitcoin proved to be a safe haven in January, considering that crypto trading is not necessarily legal in Iran. But that has not stopped crypto traders in the past. Passing the Iranian firewall is just one VPN away, which means the population can have easy access.

Much like gold during a financial crisis, Bitcoin was also an amazing alternative as a neutral asset. Iranian stocks, currencies or any assets of the sorts were quickly becoming worthless, which is why an asset unaffected by global politics had to be chosen, and that was Bitcoin.

All in all, there’s more than enough evidence to believe that Bitcoin proved to be a safe haven.

Iran’s relationship with Bitcoin

Bitcoin and Iran are quite a complicated topic to talk about by themselves, but pairing them up makes it even harder. You see, Iran has a nation-wide ban on crypto trading, however, it recently approved of local crypto mining operations as a means to have a reliable industry during times of crisis like this.

Having to slow down the economy due to American sanctions, Iran needed at least something that was on neutral grounds, and that was crypto. Any other business was facing American opposition, be it selling oil to non-US ally countries or others.

However, according to some Iranian locals, crypto has a much larger presence in the country.

Hidden activities

Several Iranian crypto traders have mentioned that having a direct connection with international crypto exchanges is not the issue, it’s the software that most traders desire that’s the issue. You see, having a VPN connection can help a trader mask their presence on a server, or pretend to be connected from somewhere else, but when downloading files, it immediately becomes obvious to government surveillance teams, of which Iran has thousands of.

Most Iranians prefer to trade with Bitcoin bots, which is a software that does the trading for the investors. They simply deposit funds and wait for the software to do its magic. In fact, according to the recent Immediate Edge reviews found in the Italian language, it’s quickly becoming a go-to tool not only for high-end investors but for beginners as well.

But, in order to get this software, Iranian investors were required to somehow access offshore servers. Considering how local travel is not necessarily an option most investors would choose one destination, Georgia.

The country is located just a couple of hours of driving and is not intertwined with the bad political history of the middle east. In fact, the country is not even part of the middle east, it’s part of the Caucasus region.

Georgia has always been a nest for Iranian investors to diversify their funds and get them out of Iran legally. A country with a pre-prepared foundation for investment was the perfect destination for Iranians, thus doubling down on the demand.

What does this prove?

This sudden appreciation of Bitcoin gives us a clue of what to expect during a future economic recession or another political crisis. It pretty much gives most crypto speculators the green light to double-down on their Bitcoin investments during these times, thus making Bitcoin the go-to asset, alongside gold, during times of financial or political turmoil.

Many experts may not be convinced just yet, but it’s also important to note that the US-Iran issue is not fully defused quite yet. There is still a lot of issues that could rise up in the future, thus giving Bitcoin investors more time to study the coin’s behaviour.

Giorgi Mikhelidze
Giorgi Mikhelidze

Giorgi is a Georgia software developer with two years of experience trading on the financial markets. He is now working to spread the knowledge about the Blockchain in his country and share all of his findings and research to as many crypto enthusiasts as possible.

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