Chances of Iran Regime Falling Surge as Unrest Spreads

By Brendan Cole

The odds of Iran’s ruling regime being ousted by protests have dropped, according to one betting platform, after demonstrations against the falling currency took place across the Islamic Republic.  

Protests started by shopkeepers in Tehran on Sunday had spread to other cities by Tuesday, with anti-government slogans being chanted, including “death to the dictator,” referring to Supreme Leader Ayatollah Ali Khamenei.  

On Wednesday, Polymarket had dropped its odds of regime change compared with the previous day. However, concerns remain over stability in the Islamic Republic after a year in which it was roiled by Israeli and U.S. airstrikes and a tightening of international sanctions.  

Iran analyst Hamidreza Azizi told Newsweek on Wednesday that he did not believe the protests posed a greater threat to the system than previous waves of unrest; however, they are challenging for the Iranian leadership at a time when there is increasing pressure from U.S. sanctions and the continued threat of a new war.  

Newsweek reached out to the Iranian Foreign Ministry for comment.

Why It Matters 

For years, Iran has been hit hard by Western sanctions, which were dialed up in September when the United Nations reinstated international sanctions lifted a decade ago, linked to the country’s nuclear program. 

The country’s currency, the rial, has declined in recent weeks amid increased diplomatic pressure from the United States and its allies. The protests, which spread from Tehran across the country, pose a challenge for the government already weakened by Israeli and U.S. strikes and new sanctions.  

What To Know 

Protests began on Sunday after shopkeepers in Tehran's Grand Bazaar staged a strike when the rial hit a record low, plummeting to 1.42 million to the U.S. dollar.

Demonstrations spread to the cities of Karaj, Hamedan, Qeshm, Malard, Isfahan, Kermanshah, Shiraz and Yazd, where police used tear gas to disperse the protesters,  BBC Persian reported. One video showed a protester curled up on the ground in Tehran, blocking a gang of black-clad police officers on motorcycles.   

University students chanted slogans including "death to the dictator," referring to Khamenei. Other slogans backed Reza Pahlavi, the son of the late Shah Mohammad Reza Pahlavi, who was overthrown in the 1979 Islamic Revolution. 

On Wednesday, prediction platform Polymarket put the chances of the Iranian government falling by the end of the year at 16 percent, down from 24 percent the previous day. 

However, the government in Tehran goes into 2026 under considerable pressure. Azizi, a research fellow at German think tank SWP Berlin, said the protests were not as widespread as the “Woman, Life, Freedom” movement of 2022 nor as violent as demonstrations in 2019, also triggered by economic grievances, including rising fuel prices.  

But he said what makes this round of protests distinct and challenging for the Iranian leadership is their timing, only months after the 12-day war with Israel, and at a moment when Tehran’s regional posture is weaker than at any point in the past decade. 

Intensifying external pressure, including the snapback of U.S. sanctions, renewed U.S. “maximum pressure,” and the continued threat of a new war have prompted figures close to the government to argue that a potential new round of Israeli attacks on Iran could be triggered or facilitated by domestic turmoil, Hazizi said. 

“Widespread protests or internal unrest could distract the authorities and force the state to redirect its attention inward, thereby increasing the system’s vulnerability,” he said.  

“This concern helps explain why the current protests are perceived as potentially more dangerous from the government’s perspective, and why we are seeing a somewhat different official response this time.” 

The Iranian government has said that it "recognizes the protests" and would listen "with patience." Meanwhile, President Masoud Pezeshkian said he had instructed the interior minister to hold talks with representatives of the protesters "to resolve the problems and act responsibly." 

Azizi said that so far, the government in Tehran appears intent on preventing the protests from turning violent and has shown greater restraint than in past episodes of repression, at least for now.  

“The apparent calculation is that any significant expansion of the protests, either geographically or in terms of violence, could create openings for foreign intervention,” he said. 

What People Are Saying 

Iranian President Masoud Pezeshkian told Iranian media: “I have asked the interior minister to listen to the legitimate demands of the protesters by engaging in dialogue with their representatives so that the government can do everything in its power to resolve the problems.” 

Hamidreza Azizi, a research fellow at German think tank SWP Berlin: “The most significant impact of the protests is likely to be a further erosion, and further visible evidence, of the Islamic Republic’s already declining legitimacy, rather than a fundamental transformation of the system itself. 

What Happens Next 

Azizi said that Iran’s security apparatus and broader military-security establishment remain largely coherent. 

With no clear opposition leadership around which a broad consensus has formed, the protests do not pose a greater threat to the system than previous waves of unrest, as yet, he added.