Is Bitcoin Really Trading at $24,000 in Iran?
January 6, 2020, by Marko Vidrih on The Capital
One of the main events last week in the world was the assassination of Iranian general Qassem Soleimani as a result of US airstrikes. Not surprisingly, the movements of financial markets, including cryptocurrency, were viewed through the prism of what happened. Then the network started talking about the fact that in Iran Bitcoin is trading above a historical maximum of about $24,000. But how reliable is this information?
Matthew Graham, CEO of Sino Global Capital, was one of the first to draw attention of his subscribers to the alleged rate excess in a particular country, who wished to know if this was so. It is noteworthy that users who call themselves Iranians wrote in the comments that they are not observing anything of the kind.
LocalBitcoins data indicates that Bitcoin in Iran is trading above 1 billion riyals or when converted at the official rate, about $24,000. However, there is a second course, an unofficial one, which interests traders much more than the first.
The dynamics of the divergence of the two exchange rates of one currency is well demonstrated in the material of Radio Farda on the depreciation of the Iranian rial.
The graph shows how the rial rate against the US dollar in the free market since the beginning of 2018 is increasingly deviating from the official one. Authorities offer cheaper dollars to businesses that are ready to import strategically important goods into the country, while they are not available to everyone else.
As a result, when calculating the Bitcoin exchange rate based on not the official price of 42,000 riyals per dollar, but the real one at 140,000 riyals per dollar, you can get the same values of about $7,500 that are currently observed in global markets.
In addition, the trading volume of Bitcoin through LocalBitcoins in recent weeks has almost come to naught.
The founder of the crypto company Galaxy Digital, Mike Novogratz, meanwhile, says that an analysis of the situation in Iran makes him believe in the upcoming rise in prices of two assets.
“The more I analyze this Iranian situation, the more bullish gold and $btc I become,” he writes.
Author: Marko Vidrih
Featured image credit: Pixabay
