3 weeks ago
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Bitcoin could take a hit traders are not pricing. If fighting breaks out between President Donald Trump and Iran, Iran’s mining pipeline can shut down and take $1 billion a year in crypto revenue with it.
Iran can mine Bitcoin for about $1,320 per coin on subsidized electricity and sell near $68,000. That is a 50x gross margin on power cost alone. Power is priced at half a cent per kilowatt hour. About 700,000 mining rigs are said to be draining 2,000 megawatts every day while civilians face rolling blackouts.
95% of those rigs are allegedly illegal, according to the Trump administration. The IRGC is linked to the largest operations and is said to be exempt from electricity bills.
Bitcoin is used for sanctions evasion because it converts state-subsidized energy into dollars that a SWIFT ban cannot touch. Each block mined on that electricity feeds that flow.
Iran is estimated at 2% to 5% of hashrate, or about 1 in every 25 blocks, which are validated by machines said to fund the IRGC, the group described as massing troops at the Iraqi border, operating missile batteries that F-22s were sent to suppress, and running nuclear facilities that B-2s are programmed to destroy.
Strikes on Iran’s power grid can erase the mining
On top of that, Iran’s power grid is failing, as the crypto mining load is akin to a mid-sized city’s electricity demand.
Independent market analyst Shanaka Anslem Perera says, “A military campaign targeting critical infrastructure, command nodes, radar installations, and military communications would cascade through the same grid that powers the mining farms.”
An estimate from JPMorgan says a 7-to-10 day air campaign could cut Iranian electricity generation by 30% to 50%.
“The global Bitcoin hashrate drops 2 to 5 percent overnight,” Shanaka predicts.
The market is pricing Iran risk into oil, not into Bitcoin. Every hash produced in Iran is on a countdown timer. When the grid goes, the hashrate goes with it, and the IRGC loses its last unsanctionable revenue stream.
Brent crude futures rose $1.13, or 1.6%, to $71.88 a barrel by 1030 GMT. U.S. West Texas Intermediate rose $1.10, or 1.7%, to $66.31. For the week, Brent was set to gain 0.2%, while WTI was poised to slip 0.1%.
Trump had said around a week ago that Iran must make a deal over its nuclear programme within 10 to 15 days or “really bad things” will happen.
Bitcoin’s retail investors run out of cash as headlines rise
As of press time, Bitcoin has crashed to $65,000, per data from TradingView. Blockstream CEO Adam Back believes that Bitcoin lacks downside support because retail investors are “all in” and do not have cash left to buy dips. He tied it to a 25% year-to-date decline.
Back said, “Bitcoin tends to be a little weak to the downside because many of the retail investors end up being all in.” He added, “They don’t have a lot of capital to buy Bitcoin.” He compared that to stock investing, where a mutual fund can sell Microsoft and buy Tesla when Tesla looks cheaper.
Iran and the United States held hours of indirect negotiations on Thursday over Tehran’s nuclear program and left without a deal. The U.S. gathered a fleet of aircraft and warships in the region.
Oman’s foreign minister, Badr al-Busaidi, mediated the talks in Geneva. He said there had been “significant progress in the negotiation,” without details.
Just before the talks ended, Iranian state television reported Tehran was determined to keep enriching uranium, rejected proposals to transfer it abroad, and sought the lifting of international sanctions, signaling it was not ready to meet Trump’s demands.
Iran’s foreign minister said talks with the Trump administration were among the country’s “most intense and longest rounds of negotiations.” Abbas Araghchi offered no specifics and said, “what needs to happen has been clearly spelled out from our side.”
Meanwhile, China on Friday advised its citizens to avoid traveling to Iran and urged people there to evacuate as soon as possible.
Iran’s Prime Minister Ali Hosseini Khamenei said during a parliament meeting that:- “Let me clarify something for the leaders of the United States: the phrase ‘Death to America’ means death to Trump and his team, not to the American people.”
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