Iranian rial crypto collapse: citizens choose Bitcoin as economic crisis worsens

Iran’s economic situation is reaching a critical point. With the local currency’s crypto collapse and widespread protests on the streets, Iranians are adopting an increasingly common financial protection strategy: transferring their bitcoins from exchanges to personal wallets. This movement is not random but represents a rational response to an economic crisis that is rapidly eroding the value of traditional savings.

The fiat currency collapse accelerates the flight to cryptocurrencies

From December 28, 2025, to January 8, 2026, when Iran imposed an internet blackout, blockchain intelligence firm Chainalysis observed an extraordinary increase in bitcoin movements. Data reveal that Iranians are withdrawing BTC from local exchanges to private wallets at a significantly higher rate than in previous periods.

The main cause of this acceleration is the unprecedented economic collapse. The Iranian rial (IRR) experienced a catastrophic devaluation: dropping from about 42 units per US dollar at the end of December to over 1,050 in just one week. This represents a loss of over 96% in value in a few days, making the currency virtually useless for preserving savings. Faced with such a scenario, Iranians see Bitcoin as a reliable solution.

Bitcoin, with its fixed supply of 21 million coins and its decentralized peer-to-peer nature, offers fundamental features that traditional currencies do not possess: resistance to censorship, portability across borders, and independence from government or banking controls. As Chainalysis highlighted in its report, this movement represents a “rational response” by the population to seek protection against their currency’s devaluation. Bitcoin provides liquidity and access to funds without intermediaries, crucial elements during periods of political and economic instability.

The BTC price history currently shows $90.06K (data updated as of January 22, 2026), confirming that the cryptocurrency continues to be a valuable resource for those seeking to preserve purchasing power.

From individual withdrawals to institutional strategies: IRGC’s expansion into the crypto sector

While ordinary citizens are appropriating their bitcoins to protect their savings, forces linked to the Iranian establishment have also embraced cryptocurrencies, but with radically different purposes and strategies.

According to Chainalysis data, blockchain addresses associated with the Islamic Revolutionary Guard Corps (IRGC), also known as the Iranian Revolutionary Guards, have gained an increasingly significant role in the Iranian crypto ecosystem. In the fourth quarter of 2025, these addresses accounted for over 50% of the total cryptocurrency value received in the country. Throughout 2025, IRGC addresses moved over 2 billion dollars on-chain, bringing the total to 3 billion dollars.

This figure is likely underestimated, as Chainalysis clarified, since monitoring is limited to wallets sanctioned by the United States and Israel. This scenario highlights a complex dynamic: while citizens use the crypto collapse as a personal escape from a monetary crisis, government institutions are developing a significant presence in the cryptocurrency market, presumably for purposes of value preservation and capital mobility on a macroeconomic scale.

A global pattern: when governments oppress, people choose decentralization

The phenomenon observed in Iran is not isolated. Chainalysis has identified a recurring trend in regions affected by economic crises, conflicts, or political repression. “This pattern of increased bitcoin withdrawals during periods of greater instability reflects a global trend we have observed in other war-torn, economically turbulent, or oppressive regions,” Chainalysis stated.

Iranian history demonstrates how cryptocurrencies respond to a fundamental human need: seeking financial autonomy when traditional institutions fail. In this specific case, the crypto collapse of the rial has transformed Bitcoin from a speculative asset into a tool for economic survival, highlighting the crucial role of blockchain technology during systemic crises.