September 24, 2023

Slump in Turkish Lira Increases Turkey’s Daily Crypto Trades

Economically embattled Turkey has seen a massive surge in the popularity of cryptocurrencies, as a report has revealed that the number of daily crypto trades has now surpassed one million. It is widely believed that this surge in trades is because of the depreciating Lira, which has now reached a new low on December 20th against the US dollar. Turkey has been experiencing a problem with inflation and data from Kaiko and Chainalysis indicates that crypto trades in the country have hit one million daily for the first time since March. The report indicates that this return to almost a million trades per day comes when the fiat currency in the country has depreciated by nearly 40% since September.

The last time that crypto trades had managed to surpass the one million mark per day had been in March, when the central bank governor had been dismissed. Turkey’s President Recep Tayyip Erdogan had unexpectedly dismissed the governor, Naci Agbal, on 22nd March. His dismissal had resulted in fears regarding inflation and the Turkish Lira had plunged in value by nearly 10%. Then had come a period of relative stability and during this time, crypto transactions had declined. But, the latest plunge in the value of the Turkish Lira has once more pushed the number of crypto trades beyond the million mark.

According to recent data, December 20th, 2021 saw the Turkish Lira reach a new low against the US dollar to 18.10. But, the Lira had made a recovery at the time of writing to reach 12.50 after a rescue plan was announced by the government. A report by Reuters indicates that restrictions that were imposed during the year could have contributed to the increase in crypto transactions because they have made it difficult for people to covert the Lira into gold. 

Another reason for the increase in crypto trades was Bitcoin’s surge to its new all-time high value of $69,000 back in November. As far as cryptocurrencies that are preferred by Turks are concerned, the report shows that the stablecoin USDT and pioneer crypto Bitcoin are widely used. This is confirmed by the data indicating that the most traded pars are TRY/USDT, whereas the 12th most traded pair is the fiat currency’s pair with BTC. Reports about Turks switching more to cryptocurrencies have surfaced a couple of months after the country’s central bank had prohibited people from using crypto assets to pay for goods and services.

Furthermore, the Turkish President Erdogan has gone as far as claiming that Turkey is at war with cryptocurrencies. This does not come as a surprise because there are several countries that are taking the same stance against these digital currencies. China had already banned crypto in the country and now it is clamping down on all crypto-related activities including mining. Likewise, the Russian central bank doesn’t have a favorable opinion regarding cryptocurrencies and has recently said that they don’t have a place in the Russian financial marketplace. However, the digital currencies are becoming mainstream because some countries have chosen to regulate them. 

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