The instability of Turkey’s lira is making many Turks scramble to get crypto, much more than for transactional purposes but for storage and security. Volume of trade in cryptocurrencies has currently hit the highest point in about 15 months as there seems to be a panic purchase.
A History of Economic Triumph
The Turkish Lira has dropped by about 40% forcing citizens to trade off both their lira and dollars for cryptocurrencies. For about 20 years, the Turkish currency has grown steadily to the envy of other European countries, however it is currently having a difficult time due to inflation. Being a powerful economy in the past, Turkey now grasps for economic breath by all means.
In the midst of all these, most citizens of Turkey don’t trust that the government will be able to stem the tide against total currency devaluation of the lira hence their turning to cryptocurrencies.
Released statistics from Chainalysis revealed that crypto purchases using the lira has increased tremendously above what was obtainable for 5 consecutive quarters, having up to $1.7 billion dollars’ worth of transactions daily across several platforms.
It further revealed that over 50% of transactions against the Turkish currency in December went into buying Tether. The lira thus gained the status of the most used national currency to buy crypto.
The continuous clamoring for cryptocurrencies among Turks has a root in their traditional way of fighting economic hardship. Before now, they would keep their money in US dollars. From reports, almost 2/3 of deposits in Turkish banks are in foreign denominations, especially euros and US dollars. The central bank of Turkey would lend these foreign bank deposits from local banks to help boost the Lira. But as the economic crisis continues, citizens have stopped trusting the government to be able to resolve the situation.
Mistrust in Government
Most Turks think that the economic crisis will linger, and if that happens, there will be a panic withdrawal of dollars that will have to be demanded from the country’s apex bank. The Wall Street Journal reported that people feared if the government could find a way to earn US dollars, and there are thoughts that the government could make banks convert dollar deposits into lira.
To stem this possible event, many Turks have opted to trade their money of several currencies in the banks for viable cryptocurrencies.
Turks now see cryptocurrencies as a viable investment route due to the instability of the lira for several months.
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