LocalBitcoins data negates “Iran buying Bitcoin” narrative

A recent drone strike killed General Qassem Soleimani, after which the tension between Iran and the US has increased. Bitcoin’s price shot up after the attack news was out, resulting in some experts to believe that Iranians had flocked to Bitcoin as a safe haven asset. However, data from certain exchanges say otherwise.

UsefulTulips.org (peer-to-peer exchange volume tracking service) data shows that this explanation for the increase is flawed. Interest in Bitcoin in Iran is actually declining, as per the figures presented. If only Bitcoin’s adoption as a hedge against political turmoil was true, one would witness an interest surge on LocalBitcoins, the planet’s largest peer-to-peer Bitcoin exchange. With just about $708 worth of the digital currency changing hands over the last few days, there’s a discrepancy between reality and expectations.

Moreover, data shows that interest in purchasing Bitcoin has been declining in Iran since the price spike that took place last summer. It looks like the few Iranian investors who were assigning capital to the cryptocurrency were doing it for speculative purposes. A recent report by BeInCrypto stated that the sudden surge in Bitcoin purchase was a result of investors hedging against the performance of their own national currency during times of uncertainty. The report mentioned many experts who believe that those looking for a safe haven have moved capital into crude oil or gold, whereas those purchasing Bitcoin are doing it in anticipation of an influx of “safe haven” investors.

Alex Krüger, analyst and economist, talked about the timing of the recent price surge in comparison with the assets mentioned above. While oil and gold increased almost immediately, Bitcoin pumped hours later. He said:

This is all hindsight of course, $BTC moved higher almost four hours after all other assets, and before the move some where even discussing how bearish Iran news could be, possibly rationalizing the initial move lower.

It's happening. People all over talking about bitcoin as a safe haven. Seems they didn't learn from the failed China narrative. Zoom in intraday. $BTC moved up 3.30 hours after the Iran news, after first dropping 1.5%. Gold and crude instead pumped right away.

Nevertheless, if people are purchasing Bitcoin as a hedge against potential instability, it’s evident that they’re not based in Iran. If they were, one could expect even a marginal rise in buying coming from Iran.