Coindesk reports a sharp increase in trading volumes on Turkey's cryptocurrency exchanges as the nation's own currency, the Turkish lira, collapsed to a new record low.
The diplomatic row that erupted between the United States and Turkey resulted in a trade war and led to a dramatic fall in the Turkish lira. The Turkish lira fell 14% against the dollar after Trump authorized a doubling of tariffs on Turkish goods, including steel and aluminum. In his televised address, President Erdogan urged citizens to exchange any currencies they hold for the lira as an attempt to keep the currency afloat.
It seems that many citizens have instead begun to look for a monetary alternative to preserve their savings. Residents of Turkey seem to have a low opinion of their national currency and its prospects, so they often turn to cryptocurrencies to protect their funds. Despite the high volatility of crypto assets, they look more attractive to the population against the backdrop of the daily weakening lira.
The largest crypto platform in the country, BtcTurk, has recorded a record increase in sales volume over the past 24 hours, by more than 130%. Turkey's largest exchange is still ranked 61st on the Coin Market Cap with just over eleven million US dollars in sales and is unable to significantly impact the crypto market. However, such a surge of interest highlights the trend of the last year. Countries facing inflation prefer to invest their money in crypto assets instead of their own national currency. Crypto assets are volatile, but in some cases their value can be more stable than national currencies. In addition to the dramatic examples of Venezuela and Iran, where currency depreciation was extreme, Türkiye is another country using crypto assets to overcome the economic crisis.
The Turkish crypto community is one of the most active, as can be seen from the results and statistics on the Steemit platform, a crypto-user social network. Turkey also has 19 crypto exchanges with full nodes, not too many considering the size of the country. Mining coins in the country is also quite profitable due to the relatively low price of electricity.
Türkiye is considering its own cryptocurrency as an alternative to the US dollar.. However, crypto exchanges and investors may face greater obstacles if politicians begin to fear the spread of Bitcoin as an alternative to the Turkish lira and restrict it at the legislative level.
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