LocalBitcoins, a peer-to-peer Bitcoin marketplace was in the news recently because a couple of merchants in Iran dealing in Iranian Rial were selling Bitcoin for 3X the actual market price. This created quite a buzz in the crypto space and was the dominant headline in the decentralized area. A snapshot of the LocalBitcoin data suggests the same Bitcoin is currently available for as high as 1,229,777,366.47 IRR which is equivalent to $29,200.

<img class="wp-image-154051 size-full" src="https://www.cryptoknowmics.com/news/wp-content/uploads/2020/01/Iran-2.png" alt="" width="1547" />

Source: <a href="https://localbitcoins.com/instant-bitcoins/?action=buy&amp;country_code=IR&amp;amount=&amp;currency=IRR&amp;place_country=IR&amp;online_provider=ALL_ONLINE&amp;find-offers=Search">LocalBitcoins</a>

While the market price of BTC is around $8,300 and the same is visible if anyone selects the USD option instead of IRR, it is still confusing and click-bait for many, given the 3X price difference.

<img class="wp-image-154048 size-full" src="https://www.cryptoknowmics.com/news/wp-content/uploads/2020/01/Iran.png" alt="" width="1582" />

Source: <a href="https://localbitcoins.com/instant-bitcoins/?action=buy&amp;country_code=IR&amp;amount=&amp;currency=USD&amp;place_country=IR&amp;online_provider=ALL_ONLINE&amp;find-offers=Search">LocalBitcoins</a>

The main reason behind the 3X difference as pointed out by many is the two different exchange rates set by the government of struggling economies.  Ali Beikverdi, a crypto expert, explained why such differences occur,
<blockquote>“It’s only possible for a few businesses and government with the special procedure to get that rate. The official rate is what the central bank says. But literally, no one except some government organizations can get that rate while no one can use it. It’s a joke. So if you wanna buy USD today in Tehran, the price is about 140,000 IRR.”</blockquote>
This phenomenon of two different exchange rates leading to the inflation of universal assets and commodities and was most recently observed in Venezuela. The government in<a href="https://www.cryptoknowmics.com/crypto/venezuelan-government-forcing-merchants-to-accept-petro-at-discounted-rates/"> Venezuela</a> had also set two different exchange rates for their national digital currency Petro, where consumers were getting the Petro at 1 million VES/PTR. At the same time, the merchants were forced to accept the same at 2.5 million VES/PTR.

The difference in the exchange rate is also not available for everyone as it is restricted to only to central banks and a few businesses authorized by the state to accept the same.  So, even if the BTC is available for almost $30k in the local currency, no one is buying it at that price.

Why Bitcoin is Being Sold For 3X The Market Price by Iranian LocalBitcoins Merchants

couple of merchants in Iran dealing in Iranian Rial were selling Bitcoin for 3X the actual market price on the localbitcoins p2p marketplace

An engineering graduate, Prashant focuses on UK and Indian markets. As a crypto-journalist, his interests lie in blockchain technology adoption across emerging economies.

Why Bitcoin is Being Sold For 3X The Market Price by Iranian LocalBitcoins Merchants

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