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Iranians embrace cryptocurrency trading as Iran struggles to cope with US sanctions and hyperinflation

Jibin M George

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Iranians embrace cryptocurrency trading as Iran struggles to cope with US sanctions and hyperinflation
Source: Pixabay

In light of the economic crisis that has plagued Iran over the past six months, many Iranians are turning to trade cryptocurrencies to hold some form of digital assets that can’t be devalued or demonetized by any central authority. Such a move on the part of many comes after the economic crisis, triggered by severe economic sanctions by the United States of America have started to take effect on the common populace.

The Persian state, that is buckling under the pressure of sanctions imposed by the USA for its nuclear programme and state-sponsored terror activities has seen its currency, the Iranian Rial, fall in value massively over the past six months. Significantly, in a move reminiscent of Zimbabwe a decade ago, the Iranian Central Bank is contemplating lopping off a few zeroes from the value of the Rial. Presently, a US Dollar is worth over 110,000 Iranian Rial.

Such a move hasn’t inspired much confidence in the Iranian populace, many of whom are aware of the fact that such a step has never worked anywhere in the world. This is part of the reason why many Iranian and foreigners settled in Iran are turning to trade cryptocurrencies which despite their falling fortunes, offer better value than any fiat money available in Iran.

According to a report by Localbitcoins.com, cryptocurrency trading in Iran spiked after the US withdrew from the nuclear agreement with Iran and re-imposed sanctions. The trades were at an all-time high last month when popular protests erupted against the government in December. The sanctions coupled with falling oil trade has led to hyperinflation in the currency, which has subsequently forced many Iranians to deal exclusively in digital currency.





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Bitcoin

Bitcoin will likely be valued at $100,000 with a market cap of over $2 trillion before the end of 2021

Priya

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Bitcoin [BTC] will likely reach $100,000 with a market cap of over $2 trillion before the end of 2021
Source: Unsplash

The entire cryptocurrency market seems to be on the brighter side of the market since the beginning of the year. A majority of the coins have recorded significant recoveries from their 2018 slump, a period during which most coins lost over 90 percent of their value, when compared to their all-time highs. Among all the coins in the market, Bitcoin [BTC] aka the digital gold, was noted to be making a massive comeback as the coin breached the $11,000 mark after nearly 15 months. The coin however, soon retracted to settle below the $11,000 level.

According to CoinMarketCap, at press time, Bitcoin was trading at $10,887.27 with a market cap of $93.549 billion. The coin recorded a 24-hour trading volume of $20.757 billion for the past 24 hours and saw a massive rise of over 17 percent over the past seven days.

Anthony Pompliano, Co-founder of Morgan Creek Digital Assets, predicted that the largest digital currency could rise to reach $100,000, before the end of 2021. Pomp added that he was around 70-75 percent confident in this prediction. He stated,

“As I have previously said, making predictions is difficult […] Part of my process as a professional money manager is forming a thesis (price target), identifying a timeline (date), and establishing a confidence level. And then constantly re-evaluating those three aspects of my thought process as I receive new information.”

Pomp however, listed six pointers that have to be understood beforehand. First, this prediction is not an investment advice, and people should do their own research before investing in the digital currency. The second is with respect to Bitcoin’s volatility, with Pomp remarking that since it was a highly volatile market, the coin could witness a significant fall before being valued at $100,000. He stated,

“I anticipate that there will be numerous 20-30% drawdowns from new all-time highs as the asset continues to appreciate in value. These mini-boom/bust cycles should not cause panic, but rather need to be understood as natural market dynamics whenever an asset gains significant value in short periods of time.”

Further, the partner of the investment firm stated that the rise would be driven by several catalysts. This includes institutional adoption, exchange-traded funds and retail product approvals, global instability, governments all across the globe manipulating currencies, markets and economy. He went on to state,

“The market cap of Bitcoin will reach $2+ trillion when Bitcoin is worth $100,000. This is less than 1/3 the market cap of gold and less than 1/40 the global money supply.”





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