Iranians Flee Exchanges After Airstrikes

On-chain data from Chainalysis reveals that Iranian cryptocurrency users moved over $10.3 million off exchanges following airstrikes by the U.S. and Israel over the weekend, with a significant chunk flowing into personal wallets. Consequently, the outflow transaction volume surged as much as 873% above the hourly average, signaling a sharp reaction to the escalating Middle East conflict.

However, this capital flight wasn’t primarily directed toward other exchanges. Chainalysis data showed a notable portion went into “other wallets,” which the firm interprets as a move toward self-custody. “Self-custodial crypto wallets provide safety and liquidity and preserve optionality,” the firm wrote, suggesting ordinary users are hedging against instability.

Alternatively, Chainalysis noted the movement could involve exchanges moving crypto to evade sanctions or state-aligned actors using platforms for money laundering. “IRGC-linked and other state actors have historically relied on local platforms and their counterparties to move and cash out funds tied to sanctions evasion, proxy financing, and illicit trade,” the report stated.

Meanwhile, Bitcoin’s price demonstrated notable resilience, rising over 6% to cross $71,000 while traditional assets like the SPDR S&P 500 ETF Trust (SPY) edged lower. According to Bitwise chief investment officer Matt Hougan, the weekend events underscore the necessity of on-chain finance. He wrote that the shift to on-chain systems is coming sooner than imagined.

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