- Turks are turning to cryptocurrencies to avoid the volatility of the pound.
- Daily cryptocurrency trading topped one million per day, according to a Reuters report.
- The Turkish lira fell 40% against the US dollar amid falling interest rates and high inflation.
As the Turkish Lira collapses, cryptocurrency trading increases.
Turkey’s crypto transaction tally topped one million a day, a level not seen since the pound’s first big drop this year in March, when the country’s central bank chief was suddenly replaced, according to a Reuters report. .
After this initial spike, crypto trading eventually fell below 500,000 transactions per day. Then the volatility of the Turkish Lira hit again recently, and daily crypto exchanges rebounded to one million, according to the report, citing data from Chainalysis and Kaiko. The data also shows that bitcoin and tether have been the main crypto exchanges in Turkey since 2019.
Turkey’s central bank announced another interest rate cut last week – following a series of previous cuts – that caused the lira’s value to fall against the US dollar, CNBC reported. President Recep Tayyip Erdogan, who called the high interest rates “bad,” pressured the central bank to oppose conventional economic wisdom on inflation, which stands at 21% in Turkey, CNBC said.
So far this year, the value of the pound has fallen 40% against the greenback, exacerbating the country’s inflation. This pushed the Turks into the volatile but rising cryptocurrency market. Reuters said Turks have often looked to gold or US dollars to protect themselves from the lira, but the cryptocurrency gains have now caught their attention.
Bitcoin has grown 65% year-to-date and the crypto market as a whole has passed the $ 1,000 billion valuation mark.
Even with the bull run, the market is still in the throes of volatility. Bitcoin, for example, hit a record high of $ 69,000 last month and is now hovering below $ 50,000.