- Turkey may be on the brink of an economic fallback as the President has removed the central bank’s governor
- The President’s move had immediate repercussions as the Lira fell sharply against the US dollar
- Citizens are now clamouring to invest in safer options which include Bitcoins and cryptos in general
The fact that Bitcoin is seen by many as a store of value has been reinforced by the humongous amount of google searches on the topic being conducted by Turks recently. As the country’s economic system faces volatility coupled with the pandemic’s uncertainties, it is only natural that the people have turned towards investments in gold and cryptos.
Bitcoin’s popularity ostensibly overtakes gold
The recent conundrum’s origin can be traced to Turkish President Recep Tayyip Erdogan’s ill-advised move to fire the governor of the nation’s central bank, Naci Agbal. This move led to general negative sentiments which plunged the lira in global forex markets. To insulate themselves from any negative side effects, Turks have shown an increasing intrigue in entities engaging with cryptos.
On March 21, Google Trends, an unbiased tracker used to qualitatively rank the popularity of Google search terms in a specific geographical region, had explicitly exhibited that the term “Bitcoin” had increased in popularity to a whooping 100 basis points. This is interesting to note that search terms such as “gold” have stagnated over the past few days, leading experts to believe that people have come to trust Bitcoin as a more reliable store-of-value than gold.
Is Turkey controlling its inflation of increasing it?
Agbal’s moves as governor, including raising the interest rates by 200 points, have been widely credited with bringing much needed stability to the lira. Thus, the sudden fall of the lira was anticipated following his dismissal. The reason for his dismissal is not yet clear, but critics have pointed out Erdogan’s belief that raising interest rates cause inflation rather than control it, to be the primary motive behind the move. The new governor, Şahap Kavcıoğlu, seems to share the President’s concerns and would generally be expected to lower rates further, which may potentially cause the lira’s further decline.
Crypto exchanges in Turkey have reported an increasing amount of trading volumes, partially attributed to the close of fiat exchanges in the weekend. Certain experts also suggested stablecoins such as tether as a viable alternative to the lira. As a result, BTC/lira and tether/lira were the largest trading pairs by volume over the weekend in Turkey.
One key takeaway is the encouraging fact that people have begun to trust and adopt crypto as potential investments. This trend is expected to continue further in the coming years.
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