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Author: Admin | 2025-04-28
Necessarily driven by illicit finance or state-sponsored activity, but rather by Iranian citizens’ deepening distrust in the government and a pressing need to move funds out of the country.Geopolitical flashpoints drive crypto outflows in IranDuring periods of heightened geopolitical instability involving Iran, we found that cryptocurrency outflows from Iranian exchanges spiked — particularly on the day of, or immediately following events of conflict.Google Trends data reinforces this connection, showing global spikes in search interest for “Iran Israel” on April 14th and October 1st — dates closely aligned with conflict escalation. This pattern aligns with broader financial developments in Iran, where the rial’s parallel market rate fluctuates sharply in response to political and military developments.Interestingly, while increased outflows were observed across all assets, including stablecoins, we noted a significantly higher volume in bitcoin. The timeline below contextualizes bitcoin outflows in relation to key geopolitical events.Spikes in bitcoin outflows occurred around the time it became known that Iran was likely to launch missiles, as well as within a few days after the events, as we see above on April 9th and 14th, 2024 — and similarly in late September and into early October of 2024.This suggests that heightened public concern over geopolitical strife was mirrored in financial behavior, with individuals turning to crypto as a hedge against geopolitical or economic uncertainty. The demand for crypto will likely remain high as sanctions pressure intensifies and Iran’s economic uncertainty persists.Bitcoin’s role in uncertain timesWhile these trends are pronounced in Iran, we have also observed similar patterns globally during times of war, economic turmoil, or government crackdowns. Bitcoin’s censorship-resistant, self-custodial nature makes it an appealing option during crises. Unlike traditional assets, bitcoin can be transferred across borders, held on-chain as a hedge against instability, and require only the storage of a seed phrase — offering financial flexibility in situations where individuals may need to flee. This makes it uniquely suited for those in jurisdictions facing geopolitical volatility and financial restrictions.Looking ahead: Holistic compliance at the ecosystem levelAlthough many Iranians have relied on cryptocurrency for capital flight, compliance programs across the global crypto ecosystem are closing off these avenues. As compliance takes center stage, exchange exposure to Iranian services continues to decline each year, dropping by about 23% between 2022 and 2024.A closer look at transfer sizes between Iranian platforms and other exchanges reveals that the number of exchanges interacting with Iranian exchanges has declined across
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