Bitcoin to the rescue as Turkish lira plummets?
Turkish crypto users are investing in BTC to protect their wealth against an ailing lira.
The Turkish lira has lost 40% of its value in 2021 owing to shrinking currency reserves, geopolitical tensions, increasing debt, and questionable monetary policy.
Turkish inflation is close to a record 20%
Turkey is currently in the midst of a financial crisis, as shrinking currency reserves, geopolitical tensions and rising debt continue to weaken the lira, resulting in Turkish citizens investing in Bitcoin to make potential long-term gains or to protect their wealth.
While the lira has lost about 40% of its value since the start of the year, those with BTC allocation could be enjoying a buffer against rapid inflation and a loss of purchasing power.
“Bitcoin is hope for Turkey,” Michael Saylor, CEO of MicroStrategy, said last week. According to Saylor, the “conversion from TRY to USD will merely slow the collapse, while adoption of BTC will reverse the damage & revitalise the economy.”
President Recep Tayyip Erdoğan’s government banned crypto for payments in April, but owning crypto has remained legal, and many people appear to be hodling cryptocurrencies like Bitcoin. A 2021 survey by Turkish crypto exchange Paribu estimates that the Turkish crypto base has grown 11-fold this year alone, with the trend expected to continue as the lira loses its strength.
Turkey is fast becoming a case study for Bitcoin’s potential benefit as a hedge against rapid inflation, as well as a form of protection against volatile fiat currencies.
To learn about Bitcoin and its likeness to gold and as a store of value, check this out.