Iran fired multiple missiles at the Fujairah Oil Industry Zone in the UAE on May 4, hitting a key oil storage and shipping hub outside the Strait of Hormuz. The same day, Tehran claimed it had fired at a US Navy vessel in the strait—a claim Washington denied, saying only warning shots were exchanged. As oil prices spiked to $120 a barrel and Bitcoin reclaimed $80,000, the episode underscored how deeply crypto has become embedded in Iran's economy.
Crypto as a sanctions lifeline
Sanctions, the absence of Visa and Mastercard, and limited access to SWIFT have pushed Iranian businesses and individuals toward cryptocurrency. According to Iran expert Ebrahim Mello, crypto is now central to both domestic and foreign trade. Many Iranians convert rials from local bank accounts into crypto and send funds abroad—to Russia, Turkey, Arab states, and even North America—via wallet transfers. Bitcoin prices appear on exchange boards in Iran, and some high-end restaurants in Tehran accept crypto payments.
Mining on cheap power — and the costs
Crypto mining grew in Iran thanks to cheap electricity backed by oil and gas reserves. Mining one Bitcoin costs roughly $1,000 to $1,500. Mining equipment turned up in factories, schools, mosques, and private buildings, causing power shortages and grid strain. The government has tried to control illegal mining, but enforcement is tough across homes and industrial sites. Interestingly, after the 2026 strikes disrupted IRGC-linked crypto mining, power demand dropped, leading to temporary stability and surplus electricity.
The limits of crypto for trade
Crypto helps Iranian businesses move money when formal systems are blocked, but it can't replace legal structure, market knowledge, or trust in cross-border trade. Iranian firms often rely on handshakes, cash, pro-forma invoices, and wallet transfers—which creates friction in markets like Russia where formal banking trails are expected. The US Treasury Department has targeted Iran's shadow banking, crypto access, shadow fleet, weapons procurement, and funding for proxies, including Chinese 'teapot' refineries.
The US launched 'Project Freedom,' a naval operation deploying destroyers, aircraft, drones, and about 15,000 service members to guide ships through the Strait of Hormuz. With tensions still high and oil markets jittery, Iran's crypto workaround remains a critical—but fragile—part of its economic survival.
