Hours after the explosion was reported in Tehran, digital money began circulating. Reports say cryptocurrency withdrawals from Iran’s largest exchange have surged following news from the US and Israel air raids scattered all over the country.

Blockchain data reviewed by analyst firms shows outflows increased by approximately 700% in a low period of time, a jump that stands out from normal daily activity.

Cryptocurrency rush follows raids

According to a blockchain tracking company Ellipticalwallets associated with Nobitex, Iran’s largest cryptocurrency trading platform, sent significantly more funds than usual within minutes of the first hit. In less than an hour, transfers reached multi-million dollar amounts. The tide was rapid. It was low too.

A moment caught my attention. Reports indicate that the heist began almost immediately after military action was confirmed. Digital assets have been moved to external wallets and, in some cases, to foreign exchanges.

For many Iranians, who already face sanctions and banking restrictions, cryptocurrencies have become one of the few ways to move value across borders.

Nobitex has long operated in a gray zone shaped by sanctions and capital controls. Cryptocurrency employ in the country has increased over the years as access to global finance has tightened. Previous waves of unrest have seen similar patterns, although not always on this scale.

Internet outage slows down the flow

The rush didn’t last long. Reports indicate that shortly after the strikes, internet connectivity across Iran dropped by approximately 99%, limiting further transfers. When connections were severed or significantly reduced, the stream of outgoing cryptocurrency transactions dropped to a trickle.

TRM Labs, another blockchain analytics firm, said the acute boost may reflect short-term panic rather than an organized effort to move huge pools of capital. A acute move from a low base can look dramatic in percentage terms.

Some transactions were completed before the power outage. Others seem to have stalled. Transfers can be initiated quickly, but are still dependent on internet access and functioning platforms. When connectivity disappears, this option disappears as well.

Weakened currency

Iran’s economy has been under strain for years. Sanctions related to the nuclear program and regional policy restricted trade and weakened the national currency. Cryptocurrency mining and trading, sometimes tolerated and sometimes restricted, provides an alternative path for some citizens and businesses.

There have been no public signs that the jump has changed broader cryptocurrency prices. Bitcoin and other major tokens responded more to global risk sentiment than to activity within Iran itself. Still, the 700% boost is another example of how quickly digital money can respond to geopolitical shocks.

For a tense few hours, cryptocurrencies became the saving grace of some users in Iran. Then the cables darkened and the flow slowed.

Featured image from Pixabay, chart from TradingView