Geopolitical tensions between the U.S. and Iran are raising significant concerns for the global Bitcoin mining landscape, with an estimated $1 billion worth of operations at risk if Iran's power grid is disrupted by conflict. Analyst Shanaka Anslem Perera highlighted this under-discussed risk, noting that Iran accounts for an estimated 2–5% of the global Bitcoin hashrate, a substantial portion that could be wiped out "if the bombs fall."
Iran legalized cryptocurrency mining in 2019 as a strategic move to convert domestic energy into globally transferable digital assets amidst tightening international sanctions. This has positioned the country as a regular "marginal seller" in the Bitcoin market, channeling state-produced BTC into circulation.
Analyst Brian Cohen provided a detailed scenario analysis, suggesting a potential conflict could have multifaceted effects. Damage to Iran's mining infrastructure could lead to a temporary drop in global hashrate, slowing block production and potentially spiking transaction fees. More significantly, it could reduce the daily supply of new Bitcoin entering the market, shifting production toward more stable Western companies that tend to accumulate BTC rather than sell it—a transformation from "forced seller to strategic holder."
Cohen also noted the risk of Iranian-linked crypto reserves being frozen or seized under sanctions, which would effectively remove those coins from economic circulation, further reducing liquid supply. He likened the potential shock to the 2021 Chinese mining ban, suggesting it could be smaller in hashrate impact but stronger in geopolitical symbolism.
The analysis extends beyond mining to potential shifts in financial infrastructure. If communication networks are damaged, low-orbit satellite internet systems like SpaceX's Starlink could restore access, enabling citizens to use cryptocurrency wallets directly and reducing dependence on traditional banking. This could accelerate digital dollarization through regulated stablecoins like USD Coin (USDC), which offer advantages in traceability and compliance, potentially boosting wallet penetration and long-term demand for Bitcoin as a store of value.
