When air defense sirens sound in the night sky, traditional stock and foreign exchange markets are closed for the weekend. Only the cryptocurrency market, which operates 24/7, has become the "first scene" for global funds to respond to geopolitical crises. In the recent fierce conflict between Iran and Israel, crypto assets such as Bitcoin have experienced violent ups and downs and capital changes.However, to truly understand the performance of the crypto market in this geopolitical storm, we cannot just stop at the ups and downs of the K-line.Iran, a major Middle Eastern country that has long been under severe Western financial sanctions, is itself a living "national cryptocurrency survival guide." Surviving between the cracks: The history of cryptocurrencies in Iran Iran’s embrace of cryptocurrency does not stem from the utopian beliefs of technology geeks, but from an extremely realistic survival instinct. In 2018, the United States unilaterally withdrew from the Iran Nuclear Agreement and restarted comprehensive sanctions on Iran. Iran was kicked out of the SWIFT (Society for Worldwide Interbank Financial Telecommunication) system.This means that Iran has almost lost the ability to conduct international trade settlements through formal channels, domestic inflation has soared, and the legal currency rial has depreciated significantly. In this context, borderless and censorship-resistant cryptocurrencies have become Iran’s “financial lifebuoy.” In August 2022, Iran completed an import order using cryptocurrency worth US$10 million for the first time, which marked that the Iranian government officially used cryptocurrency as an official tool to circumvent the hegemony of the US dollar and conduct international trade settlements.Subsequently, Iran passed legislation allowing companies to use cryptocurrencies mined legally within the country to pay for imported goods. For ordinary Iranians, facing the depreciation rate of legal currency like waste paper, purchasing Bitcoin or USDT has become one of the few options to protect the purchasing power of wealth.Underground banks and P2P transactions are extremely active in Iran, and cryptocurrency has become the de facto “digital dollar.” Energy Arbitrage: The Love-Hate History of Iranian Mining If trading and using cryptocurrency is for circulation, then "mining" is the best way for Iran to convert sanctioned physical energy into global hard currency. Iran is extremely rich in oil and natural gas resources, and the government provides high subsidies for electricity.In 2019, the Iranian government officially legalized crypto mining and established a licensing system.Miners are required to identify themselves, pay a slightly higher electricity bill, and sell the bitcoins they mine to the central bank. During the bull market from 2020 to 2021, extremely low electricity bills attracted a large number of domestic and foreign investors, especially Chinese companies, to establish large mining farms in Iran. According to data from the Cambridge Center for Alternative Finance (CCAF) at the time, Iran once occupied 4.5% to 7% of the total computing power of the global Bitcoin network, becoming the world's top mining power.This can bring Iran hundreds of millions or even billions of dollars in revenue every year, directly supplementing the country's foreign exchange reserves. However, the good times did not last long.The huge mining industry (especially the large number of illegal "black mining farms") has brought unbearable load to Iran's old power grid.In the summer and winter of 2021, serious blackouts occurred in many cities in Iran.This forced the Iranian government to take severe action, frequently announcing "seasonal mining bans", dispatching police to seize smuggled mining machines, and requiring all mines to register and pay electricity bills at higher "export electricity prices." Iran’s attitude towards mining is ambivalent: it needs it to earn foreign exchange and break sanctions, but it is also worried that it will overwhelm people’s livelihood infrastructure.This policy of “combination of expansion and expansion” has run through Iran’s mining history in recent years. Bitcoin amid the Iran-Israel conflict: Panic, sell-offs and capital flight In the recent direct conflict between Iran and Israel, the cryptocurrency market, as the world's most liquid frontier, has shown an extremely sensitive response. Data shows that Bitcoin prices experienced violent fluctuations over the weekend after the conflict: they fell from about $65,000 to a low of $63,000, then rebounded to $68,196, but eventually fell back to about $65,300, down 2.1%.Ethereum also fell 2.3% to $1,912.The market value of the entire crypto market once shrank by approximately US$128 billion. Meanwhile, cryptocurrency withdrawals at Iranian exchange Nobitex surged 700% in minutes after the first attack over the weekend.Users move assets to personal wallets or international platforms to avoid potential local controls or freezes.Nobitex is the largest domestic cryptocurrency exchange in Iran and the preferred platform for Iranian users to enter the global cryptocurrency market, playing an important role in the country's digital asset ecosystem. In fact, the military conflict between Iran and Israel since 2024 has extended to the cryptocurrency field.On the day of the Israeli air strike on Iran on June 13, 2025, Bitcoin plunged nearly 4%, falling below US$103,000. Within 24 hours, the entire market liquidated more than US$1.1 billion.Earlier, on April 14, 2024, after news of the Iranian missile attack on Israel came out, Bitcoin plummeted by more than $7,000 in a single day, and more than 250,000 people liquidated their contracts. X platform data shows that the volume of Iran-related encryption discussions surged during the conflict, and users were worried about the safety of their funds, leading to increased outflows of stablecoins such as USDT.However, some analyzes show that short-term Bitcoin holders do not show a typical risk aversion response. Some investors regard Bitcoin as "digital gold" and seek hedging during conflicts. As of press time on March 3, Bitcoin has rebounded to around $68,500, and Ethereum has risen to $2,000. The history of cryptocurrencies in Iran provides a real-life example of how the country can use decentralized technology, and the current Iran-Israel conflict puts this experiment to the test in extreme risk events.The price and liquidity response of the crypto market reveals the behavioral patterns and investor psychological preferences of digital assets such as Bitcoin under geopolitical shocks.In the future, as the conflict progresses and the global regulatory environment evolves, these structural impacts will further shape the institutional boundaries and price mechanisms of the crypto market.