Political tensions between the US and Iran continue to increase following a recent drone strike that killed General Qassem Soleimani.
Shortly after news of the attack broke, the price of Bitcoin suddenly increased, leading some industry commentators to draw the conclusion that Iranians had flocked to Bitcoin as a safe haven asset. However, data from exchanges like LocalBitcoins shows otherwise.
Data taken from peer-to-peer exchange volume tracking service UsefulTulips.org suggests that this convenient explanation for the increase is flawed. According to the figures presented, interest in Bitcoin in Iran is actually declining.
If the narrative peddled by those most optimistic for Bitcoin’s adoption as a hedge against political instability was true, you would expect to see a sudden spike in interest on LocalBitcoins, the planet’s largest peer-to-peer Bitcoin exchange.
However, with just US$708 worth of the digital currency changing hands over the last week, clearly, the reality isn’t matching up to the expectations of some.
In fact, data suggests that interest in buying Bitcoin has actually been dwindling in Iran since the price spike last summer. Rather than buying the asset as a store of value during uncertain times, it appears that the few Iranian investors that were allocating capital to the cryptocurrency were doing so purely for speculative purposes.
A Recall of Bitcoin’s Growth in Africa
CoinNewsExtra recently reported on the likelihood that the sudden increase in Bitcoin buying was the result of Google searches of Bitcoin in Africa especially.
While interest in Bitcoin across China may be picking up again, the last 12 months have been dominated by Africa when it comes to Bitcoin fever. According to Google Trends, Nigeria and South Africa take the number one, and two, spot for searching the term Bitcoin last year.
In fact, Ghana comes in at number five with Austria and Switzerland rounding out the top five in searching for Bitcoin. While surprising that these African nations are showing such interest, it cannot be deemed unexpected as the potential that blockchain and cryptocurrency has for African nations is immense.
For instance, peer-to-peer (P2P) bitcoin exchange Paxful has seen increased volumes from users in Nigeria, Ghana, Kenya, U.S. and India in the past 12 months. Terming it a “major growth milestone,” Paxful said it added over 800,000 wallets during the period and now services a total of 3 million wallets.
No Growth for Bitcoin
One crypto analyst and economist, Alex Krüger drew attention to the timing of the recent price pump, compared with the assets. Gold and oil increased almost immediately. Bitcoin, on the other hand, shed value on the news before it pumped hours later.
If they were, you would expect even a marginal increase in buying coming from Iran. The fact that the peer-to-peer exchange in Iran has seen $100,000+ weeks during periods of optimism in the market, last week’s sub-$1,000 LocalBitcoins volume suggests that Bitcoin buying is actually close to an all-time low in the nation.