In this era of rapid development of digital currencies, the price fluctuations of Bitcoin have attracted the attention of investors around the world. However, in Iran, the premium of this virtual currency is particularly prominent, even as high as $24,000, which is a staggering figure. What causes such a huge premium? In this article, we will delve into the story behind this phenomenon and reveal its complex economic and social background.

First of all, Iran's economic environment is one of the important factors leading to the premium of Bitcoin. Due to long-term international sanctions, Iran's economic development has been severely affected, and problems such as currency depreciation and inflation have emerged one after another. According to statistics, Iran's inflation rate has hit new highs in the past few years, reaching about 40% in 2023. Against this background, many Iranians began to seek safe-haven assets, and Bitcoin has gradually become their first choice due to its decentralized and relatively safe characteristics.

In addition, Iran's monetary policy also affects the demand for Bitcoin. The depreciation of the Iranian rial has led to a surge in people's demand for foreign currencies, especially the US dollar and the euro. Bitcoin, as a globally used digital currency, just meets this demand. Many Iranians transfer their assets from the unstable rial by purchasing Bitcoin to avoid asset shrinkage caused by currency depreciation. This increase in demand has undoubtedly driven up the price of Bitcoin, which in turn led to the premium phenomenon.

Furthermore, Iran's technological infrastructure has promoted the circulation of Bitcoin to a certain extent. Despite facing sanctions, Iran's younger generation has a high acceptance of technology and has shown a strong interest in the field of digital currency. Many young Iranians participate in Bitcoin transactions through online platforms and even engage in mining operations. According to relevant data, Iran's Bitcoin mining computing power accounts for about 3% of the world's total computing power. This phenomenon not only reflects the enthusiasm of the Iranian people for Bitcoin, but also further promotes the activeness of the market.

However, it is worth noting that the Iranian government's attitude towards Bitcoin is inconsistent. On the one hand, the government hopes to stimulate economic growth by developing the digital currency industry, and on the other hand, it is wary of Bitcoin and other cryptocurrencies. This contradictory policy makes the market full of uncertainty, and many investors face risks when participating in Bitcoin transactions. The government's regulatory policies may change at any time, which also forces some investors to bear potential risks while pursuing high returns.

When exploring the reasons for the premium of Bitcoin in Iran, we cannot ignore the impact of the international market. The fluctuation of global Bitcoin prices directly affects the trend of the Iranian market. Due to Iran's isolation from the international market, when international prices rise, the Iranian market often lags in response, resulting in greater fluctuations in local Bitcoin prices. This price inconsistency further exacerbates the premium phenomenon of Bitcoin.

It is worth mentioning that many Iranians do not fully understand the nature of Bitcoin. They regard it more as an investment tool. In the case of information asymmetry, many people blindly follow the trend, leading to an irrational boom in the market. This phenomenon is particularly evident among young people, who often see heated discussions about Bitcoin on social media and decide to invest, but lack sufficient understanding of its potential risks. The prevalence of this investment mentality has led to the price of Bitcoin in the Iranian market being much higher than that in the international market.

In addition, Iran's cultural background also affects the acceptance of Bitcoin to a certain extent. In this country, traditional investment methods such as real estate and stock markets have been considered by many people as relatively unsafe options. In contrast, Bitcoin, as an emerging investment tool, has attracted many investors seeking high returns. Especially in the context of socioeconomic instability, many people are willing to take risks to try this emerging market in order to obtain higher returns.

It can be said that the premium phenomenon of Bitcoin in Iran is the result of the interweaving of multiple factors. The economic environment, monetary policy, technological infrastructure, government supervision, international market fluctuations, and cultural background have all played an important role in this. Although the high premium phenomenon of Bitcoin in the Iranian market has attracted widespread attention, we should also see the deep-seated problems reflected behind it.

In the future, with the development of the global digital currency market, Iran's Bitcoin premium phenomenon may change. If international sanctions are lifted and Iran's connection with the global market is strengthened, the price of Bitcoin may return to rationality. At the same time, the government's regulatory policies in the field of digital currency will also have an important impact on the market. For investors, understanding market changes and rational investment will be the key to dealing with fluctuations.

In short, the phenomenon of Iran's Bitcoin premium of up to $24,000 not only reflects the complexity of the local economy and society, but also provides us with an important perspective to observe the digital currency market. In this rapidly changing era, investors need to look at every investment opportunity more cautiously. Only on the basis of a deep understanding of the market can they make wise decisions.

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As tensions between the United States and Iran rise, Iranian sellers of Bitcoin on peer-to-peer trading platform LocalBitcoins are pricing the token at around 1 billion Iranian Rials (about $24,000).

Founder of crypto analytics agency Messari Ryan
Selkis explained that the premium could be due to Iranians looking to sell off their potentially depreciating national currency, especially as the likelihood of a war with the United States grows.

He said, "Today on LocalBitcoins, Iranian Bitcoin is trading at nearly $24,000 in U.S. dollars. This is unlikely to be a reaction from the Iranian military. Instead, it could be innocent and desperate Iranians looking for a way out of the impending chaos."

On the other hand, Iran has seen a steady decline in trading volumes on LocalBitcoins in recent months. This is likely due to the Iranian government restricting internet access in the country since November in response to nationwide protests against rising fuel prices.

Last month, Iranian President Hassan
Rouhani proposed creating a cryptocurrency for Muslim countries as an alternative to the U.S. dollar. He said the United States has used economic sanctions as a "primary tool of hegemony and bullying" against other countries, and that the Muslim world should design measures "to free itself from the domination of the dollar and the U.S. financial system."

Last November, the Iranian government determined electricity rates for cryptocurrency miners in the country and will reward those who report illegal mining activities in the country.