Turkish Lira is facing slumps after slumps and has been artificially strengthened to face inflation. On the other hand, crypto trade volume has come back to its usual norm i.e. over 1 million trades per day, which hasn’t been seen since the end of March 2021.
Turkey is currently battling against the causes which are severely damaging the country’s economy. Lira, Turkey’s national currency, is losing value for the past 8 months and now inflation is further making the situation more difficult. Turkish people, especially investors, are worried about where to put their money in the prevailing situation.
Traditional trades, as well as Gold as a hedge against inflation, have been rigorously tested in Turkey by the investors. However, the investors couldn’t find the results they were expecting.
While Turkey continues to battle against the deteriorating economy and slumping of the Turkish Lira, investors have found hope in digital currencies. Over the past few weeks, there have been more than a million trades involving digital currencies which are taking place on daily basis. The reason for this huge crypto trade volume is the value reduction in the Turkish Lira. The value of the national currency of Turkey has decreased by 40% since August-September, 2021.
Over a million crypto trades were usual prior to the dismissal of the country’s central bank’s Governor in March at the hands of the Turkish President. From there onwards, the worst fears of inflation took over the country which resulted in the 10% decrease in the value of the Turkish Lira. In between April and May, however, partial stability returned at the cost of reduced crypto transactions.
From May onwards, in none of the later months, crypto trades went over the 1 million mark. Instead, they were reduced to at least 66%. Very recently, on 20th December 2021, the Turkish Lira faced yet another major slump which reduced its value against USD @ 18.10 Lira = 1 USD. The slump awoke a sense of emergency within the Turkish Government which quickly came in aid of the national currency. The Government initiated a plan called “rescue” through which Lira’s value had been strengthened artificially. As of 21st December 2021, the deployment of the “rescue” plan has enabled Lira to recover some bit of its lost value. Against USD, approximately 12.50 Liras make up 1 USD.
The good thing for the Turkish investors however is that crypto trade volume has surged in the month of December 2021. It is now back of its usual norm i.e. over 1 million trades of digital currencies per day. It seems that the boost is coming from the restriction on Gold investment in Turkey. The investors were earlier restricted to converting their national currencies into Gold by the order of the Turkish President.
For the time being, Turkish investors are putting their monies into stablecoins as well as Bitcoin. Currently, the currency pair of Lira with Bitcoin is holding 12th position in the Turk economy.