How Iran is fighting a war under sanctions: The secret Bitcoin mining keeping its economy afloat

Inside Iran’s crypto strategy: The Bitcoin mining helping it bypass Western sanctions

Iran has increasingly turned to cryptocurrency to bypass international sanctions and sustain foreign purchases, analysts say, creating a financial channel outside the traditional dollar-based system.

The US-Israeli war on Iran is putting renewed focus on the country’s $7.8 billion cryptocurrency market, which citizens and authorities there have increasingly turned to for storing and sending money during periods of turmoil.

Iran is using cryptocurrency to keep parts of its economy running despite heavy international restrictions. Experts say the country has turned to large-scale Bitcoin mining to generate funds that can be used outside the traditional global banking system.

“Iran can mine a single Bitcoin for roughly $1,300,” said Jake Percy, a US-based bitcoin strategist. With Bitcoin trading near $73,000, he noted that it creates a margin of more than $70,000 per coin that can be used for transactions outside the regulated financial network. “This is not civilian speculation,” Percy said. “This is state military financial infrastructure.”

Analysts believe the strategy allows Iran to bypass financial channels usually monitored or controlled by Western governments. By producing Bitcoin domestically and transferring it through digital wallets, payments can move across borders without relying on banks or international payment networks.

Tehran legalized Bitcoin mining in 2019 as an economic experiment, but experts say it has since evolved into a strategic sanctions-resistant payment network. By mining Bitcoin domestically and transferring it through state-controlled wallets, Iranian entities can reportedly pay overseas suppliers for machinery, fuel and military components without relying on the global banking system.

Crypto market growth amid sanctions

Despite years of sanctions, Iran’s cryptocurrency ecosystem has expanded rapidly. Blockchain analytics firm Chainalysis estimates the market reached about $7.78 billion in 2025.

According to the firm, crypto wallet addresses linked to the Islamic Revolutionary Guard Corps (IRGC) accounted for more than half of the country’s inflows in late 2025, moving over $3 billion in a single year.

Researchers say digital assets have become a critical financial tool for the country as it faces currency depreciation, high inflation and limited access to international banking systems.

Blockchain data reveals wartime financial signals

The same blockchain technology that enables sanctions evasion also provides real-time financial data that analysts can track.

Following US and Israeli airstrikes on Tehran on February 28, researchers noticed unusual crypto movements before the scale of the attacks was fully confirmed through traditional intelligence channels.

Between February 28 and March 2, about $10.3 million flowed out of Iran’s largest cryptocurrency exchange, Nobitex. Chainalysis data showed hourly outflows during the peak period were 873% above the 2026 average.

“That’s real time financial signal intelligence,” Percy said. “A public ledger anyone with the tools can analyze.”

Spike in crypto withdrawals after strikes

Blockchain research firm Elliptic also reported a sharp rise in activity on Nobitex immediately after the airstrikes.

The exchange saw a peak hourly outflow of $2.89 million on February 28, compared with $358,000 the previous day, representing nearly a 700% jump.

Elliptic said Nobitex has more than 11 million users and has previously been linked to financial activity connected with Iran’s military network.

Chainalysis recorded that roughly $2.3 million left Iranian crypto exchanges during the busiest hour after the strikes — about 873% higher than the normal hourly average.

Researchers say it is difficult to identify exactly who initiated the transfers because crypto wallet addresses appear only as alphanumeric strings on the blockchain.

“Some of these flows are almost certainly ordinary Iranians moving funds in response to rising risk,” Chainalysis said. “Others may be exchanges reshuffling liquidity or attempting to reduce the visibility of their operations on-chain, or state-aligned actors leveraging mainstream platforms to transfer funds.”

Crypto’s expanding role in Iran’s economy

Analysts estimate that cryptocurrency transactions in Iran reached between $8 billion and $11 billion in 2025 as both government-linked entities and ordinary citizens increasingly relied on digital assets.

According to Elliptic, Iran’s central bank purchased more than $500 million in dollar-backed digital assets within a year to help stabilise the country’s currency and circumvent sanctions.

“We have these large geopolitical events happening, and a collapsing domestic currency,” said Kaitlin Martin, senior intelligence analyst at Chainalysis. “It’s the perfect storm for users to turn to the cryptocurrency environment.”

A wider sanctions challenge

Iran is not alone in exploring crypto-based financial networks. Chainalysis’ 2026 Crypto Crime Report noted that illicit cryptocurrency addresses received about $154 billion in 2025, driven largely by a surge in activity from sanctioned entities.

Russia reportedly processed $93 billion through a sanctioned stablecoin, while North Korean hackers stole around $1.5 billion in a single cryptocurrency exchange attack, allegedly channeling the funds into its weapons program.

Experts say these developments highlight a growing challenge for the global sanctions system, which has traditionally relied on control of the dollar-based financial infrastructure.