 ▲ Bitcoin (BTC) mining |
U.S. and Israeli airstrikes on key sites in Iran have sent shockwaves through the cryptocurrency market amid concerns over disruptions to the Bitcoin (BTC) mining network and the potential for large-scale sell-offs.
According to a report by CoinGape, the military clashes in the Middle East this weekend have directly exposed Iran’s mining network to serious threat. Investors are reacting with extreme sensitivity as they monitor the possibility that crypto operations backed by Tehran authorities could suffer physical damage, including destruction of power grids.
A Haaretz report noted that Iran legalized Bitcoin mining in 2019. Authorities have supplied licensed operators with cheap electricity in exchange for selling mined Bitcoin to the central bank, which has used it as a tool for trade settlement. This system has served as a crucial financial channel enabling Iran to bypass U.S. dollar restrictions and pay for imports, functioning as a source of billions of dollars in foreign currency each year.
Iran currently accounts for between 2% and 5% of the global Bitcoin hash rate, with some analyses estimating the figure could reach as high as 15%. A significant number of mining facilities are reportedly closely linked to the Islamic Revolutionary Guard Corps (IRGC). Data shows that more than $3 billion flowed into IRGC-affiliated wallets in 2025, representing a substantial share of Iran’s $7.8 billion cryptocurrency ecosystem.
If power infrastructure is paralyzed due to the conflict, mining farms risk shutdowns or damage to costly equipment. Iranian authorities have been producing Bitcoin at an estimated cost of about $1,300 per BTC and selling it at market prices. Destruction of facilities would effectively cut off a key source of national revenue.
The cryptocurrency market reacted immediately. Following reports of the airstrikes, Bitcoin plunged roughly 7% to around $63,000. It later rebounded on bargain buying and is currently trading at $67,209.22, up 3.6% from 24 hours earlier. Its market capitalization stands at $1.34 trillion, with trading volume reaching approximately $40.23 billion.
Iran’s crypto economy extends beyond mining to include foreign trade financing through stablecoins such as Tether (USDT). As of 2025, the Central Bank of Iran holds at least $507 million worth of Tether to defend the value of the rial and pay for imports. Nevertheless, the rial has depreciated by more than 96% against the U.S. dollar.
As the conflict intensifies, large-scale liquidation scenarios are being discussed in the market. There are growing fears that if mining output drops sharply, operators may dump their reserves onto exchanges to cover losses. Additionally, rising oil prices stemming from heightened tensions in the Strait of Hormuz are increasing inflationary pressure, further dampening investor appetite for risk assets such as cryptocurrencies.
Past cases suggest that the crypto market typically experiences an initial drop of 5% to 15% during the early stages of armed conflict before stabilizing within days. Given the repeated pattern of price recovery after temporary geopolitical sell-offs subside, the key factor determining market direction will likely be whether the current conflict escalates further.
Disclaimer: This article is provided for informational purposes only and does not constitute investment advice. The publisher is not responsible for any investment losses incurred based on this content.