As the value of Turkey’s national currency Lira plummets, crypto trading has surged back to an all-time high in the country. The worsening economic situation has forced Turks to park their hard-earned savings elsewhere to avoid soaring inflation.
According to Kaiko and Chainalysis, the blockchain analysis firm, Turkey’s number of cryptocurrency trades has breached the one million-a-day threshold.
Turkey’s Mismanaged Economy Causes Suffering
Worrying videos of Turks queuing up for cheap bread outside bakeries are viral on social media. President Erdogan’s mismanagement of the economy has resulted in one of the worst economic crises in Turkey.
Official data shows that inflation is at a staggering 21% in 2021, while Lira lost nearly half its value since January. This means that prices of essential commodities like milk, bread, medicine, and toilet paper have shot up the roof.
“Unemployment, high living costs, price increases, and bills are breaking our backs,” noted the Confederation of Progressive Trade Unions.
Bitcoin and Tether to the Rescue
Galloping inflation is not uncommon to the Turks. Since 2008, the Lira currency has lost almost 90% of its value. Converting Lira to gold or US dollars was the preferred practice to escape punishing inflation.
However, with the sharp increase in cryptocurrency prices and Ankara tightening capital conversion policies, crypto assets have gained popularity.
From around 5,00,000 trades per day, the number has more than doubled, crossing the one-million mark this month. Bitcoin (BTC) and Tether (USDT), stablecoin pegged to the US dollar, has been the most widely traded crypto assets.
Since its inception, crypto enthusiasts have advocated bitcoin as an alternative to traditional currencies like Lira that lose value dramatically. Bitcoin’s limited supply of 21 million is seen as an answer to fiat’s inflation problem and as a reliable store of value despite volatility.
Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.
Table of content
Subscribe to Our Newsletter with exclusive content.