Protests erupted in Tehran on Monday after Iran’s rial fell to record lows against the U.S. dollar.

Locals blamed the Central Bank of Iran’s fiscal policies as the currency slide eroded household savings.

Horsley points to bitcoin as a hedge

Bitwise CEO Hunter Horsley said bitcoin offers a way to protect against collapsing currencies.

Horsley wrote on X:

“Economic mismanagement — The story of the past, present, and future,” Bitcoin is a new way for the people to protect themselves.

The Financial Times reported the rial has lost more than 40% of its purchasing power since the two-week war with Israel in June.

It is now around 1.4 million rial per dollar.

Alex Gladstein, chief strategy officer at the Human Rights Foundation, noted the official rate in the early 1980s was 70 per dollar.

Central bank turmoil and banking stress

Central Bank of Iran governor Mohammad Reza Farzin resigned amid the protests.

Iran’s central bank warned in February that eight other local banks risk dissolution unless they implement reforms.

In October, state-owned Bank Melli reportedly fell bankrupt, putting the assets of more than 42 million customers into jeopardy.

Mining restrictions and enforcement

While bitcoin trading is permitted in Iran, rules around self-custody are less clear and bitcoin mining is heavily regulated.

VanEck head of research Matthew Sigel said Iran recently cracked down on unregistered mining, including offering cash rewards for citizens to report neighbors.

The report also cited estimates that cheap electricity could allow mining bitcoin for about $1,300 per BTC as of October.