Next to Istanbul banks on the banks of the Golden Horn there is a billboard that displays the current exchange rate of the Turkish lira: its value in dollars, euros, pounds, and bitcoins. The last of the currencies may seem out of place given the bearish market trend. Despite this, trading volume on Turkish cryptocurrency exchanges has increased by 37% since the beginning of October.
The summer lira crisis, combined with the relatively young age of the country's average population, explains why many in Turkey are looking for an alternative to fiat. The survey, conducted between March 26 and April 6 (before the lira crisis), found that 18% of Turks - compared to 9% of Europeans and 8% of Americans - owned cryptocurrency.
After Trump's tweet on August 10, the price of the lira fell by more than 20% in one day. Although the currency has recovered slightly in value since then, it has lost more than 30% in a year. Inflation is a major problem for the country, with analysts warning that the economy could enter a recession.
On August 13, the anonymous co-founder of Bitcoin.org tweeted that the number of visitors from Turkey had increased sharply, adding: “This is how Bitcoin works.. replacing fiat currencies when they collapse.”
Despite (or perhaps because of) Bitcoin's popularity in the country, the government is trying to steer people towards more traditional types of investments.
Erdogan's strategy was to convert citizens' dollars into the lira while strengthening trade relations with Russia, China and Iran. Turkey's Directorate of Religious Affairs (Diyanet) also points out that Muslims are prohibited from trading or using cryptocurrency. Not long ago, however, Turicon tried to create an alternative national cryptocurrency, but its founder was soon caught trying to make off with millions of dollars.
Despite the speculative and volatile nature of cryptocurrencies, they are an attractive form of alternative investment in emerging markets. For example, according to a UN report, cryptocurrencies are extremely popular in Africa. Little Georgia is second only to China in Bitcoin mining, and the first country to store land ownership information on the blockchain.
According to slate.com
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