As Iran's government clamped down on recent street protests, locals took direct custody of their bitcoin, highlighting the cryptocurrency's decentralized, censorship-resistant appeal. Beginning on December 28, street demonstrations rocked across multiple cities in Iran against the Islamic Republic government and a deepening economic crisis, marked by rampant inflation and currency collapse.
From the start of the protests to January 8, when Iran imposed an internet blackout, blockchain intelligence firm Chainalysis observed a notable increase in blockchain transactions withdrawing BTC from Iranian exchanges to unknown personal wallets. "Most telling is the surge in withdrawals from Iranian exchanges to unattributed personal Bitcoin wallets. This surge suggests Iranians are taking possession of Bitcoin at a markedly higher rate during protests than they were beforehand," Chainalysis said in a report.
The firm said the urge to stash bitcoin is a "rational response" to the collapse in Iran's official paper (fiat) currency, the rial (IRR), which eroded the purchasing power of the national unit. The rial has tanked from roughly 42 per USD at the end of December to over 1,050 this week, a massive slide which has rendered it worthless. Bitcoin, the peer-to-peer decentralized money with a fixed supply of 21 million coins, is widely seen as a powerful hedge against collapsing paper currencies and economic crises. Its censorship-resistant nature and the fact that it can be moved across borders without bank or government interference make it especially vital during political unrest, as Iranians face now. BTC therefore provides "liquidity and optionality" to Iranians, facilitating quick access to borderless cash outside official channels.
The trend in Iran is consistent with the global pattern: when governments squeeze people, they turn to cryptocurrencies. "This pattern of increased BTC withdrawals during times of heightened instability reflects a global trend we’ve observed in other regions experiencing war, economic turmoil, or government crackdowns," Chainalysis said.
Forces linked to Iran's establishment have embraced crypto as well. According to Chainalysis, addresses linked to the Islamic Revolutionary Guard Corps (IRGC), also known as the Iranian Revolutionary Guards, have steadily grown as a share of Iran's overall crypto activity, accounting for over 50% of all crypto value received in the fourth quarter of 2025. These IRGC addresses handled more than $2 billion on-chain, bringing the total to $3 billion in 2025, a figure likely underestimated, the firm said, since it tracks only those wallets that the U.S. and Israel have sanctioned.
Chainalysis added that Iran's crypto ecosystem reached over $7.78 billion in 2025, having grown at a notably faster pace compared to the year prior. The firm observed that crypto activity in the country surges during periods marked by major internal or geopolitical developments. Notable jumps occurred during the Kerman bombings in January 2024, missile strikes against Israel in October 2024, and the 12-day war in June 2025, which included attacks on the nation's largest crypto exchange and leading bank.
The report also noted that large withdrawals under $10,000 recorded the strongest growth, with the average dollar value withdrawn rising 236% and the number of transfers increasing 262%. Medium withdrawals under $1,000 climbed 228% in value and 123% in transfers. Very large withdrawals under $100,000 also rose, with dollar amounts up 32% and transfers up 55%. Even small withdrawals under $100 increased, with average value up 111% and transfers up 78%.
Chainalysis stressed that Bitcoin is serving a broader function during the crisis in Iran than just protecting value. The firm observed that for many Iranians, cryptocurrency has become an "element of resistance." Unlike conventional assets, which can be illiquid and vulnerable to state oversight, Bitcoin's self-custody and resistance to censorship give individuals greater financial mobility. This flexibility is especially critical in situations where people may need to leave the country or rely on financial systems beyond government control.
