Following the attack on Iran by #USIsraelStrikesIranBTCPlunges ABD, analyst Brian Cohen shared an intriguing scenario analysis regarding the Bitcoin (BTC) market. Cohen noted that a potential conflict could both tighten Bitcoin supply and accelerate digital dollarization through stablecoins.

According to the analyst, Iran has long used Bitcoin not only as an investment tool but also as an economic instrument due to sanctions. Industrial mining activities powered by subsidized electricity allowed the country to convert its energy into Bitcoin, providing indirect access to the global system. The portion of BTC directed through government channels positioned Iran as a regular “marginal seller” in the market.

Cohen stated that in the event of a conflict, damage to Iran’s mining infrastructure could cause a temporary drop in the global hashrate. This could reduce the amount of new Bitcoin entering the daily market and shift production to more stable countries, especially Western companies that tend to hold BTC. He argued that such a transition could mean a shift from “forced seller to strategic holder.”

On the other hand, the possibility of freezing or confiscating Iran-related crypto reserves under sanctions was also a significant part of the analysis. Cohen explained that coins that are inaccessible or stored long-term are considered out of circulation economically, which would lead to a tightening of liquid supply.

If communication infrastructure is damaged after the conflict, low-earth orbit satellite internet systems could be activated. Specifically, SpaceX’s Starlink network and AST SpaceMobile infrastructure could restore financial access.

Widespread satellite internet access could enable citizens to directly access global digital markets, actively use crypto wallets via mobile devices, and reduce dependence on traditional banking systems.

Cohen also highlighted the potential for digital dollarization. He noted that in modern reconstruction processes, stablecoins could replace physical cash. Assets like USD Coin issued by Circle offer advantages in traceability, programmability, and compliance with sanctions. According to Cohen, stablecoins serve as an entry point into crypto markets. Increased use of digital dollars could boost wallet penetration and, in the long term, lead to a shift toward Bitcoin for store of value.

He compared this process to China’s mining ban in 2021. Remembering that the hashrate rapidly moved to the West and institutional ownership increased at that time, Cohen argued that a shock originating from Iran might be smaller in terms of hashrate but more significant in terms of geopolitical symbolism.

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