The drastic depreciation of the Turkish lira has also had a positive effect, in addition to the shocks of the country’s economy, which have to do with trading and trading in cryptocurrencies, such as bitcoin. These are reflected in analysts’ data, which show a growing interest in this asset.
Investors hope to make a profit from trading in it and protect themselves from inflation. It is worth noting that the Turkish currency has lost more than 13% of its value against the dollar since President Recep Tayyip Erdogan ousted central bank governor Naci Agbal. And this raises fears of a more relaxed policy and intensification of pressure, which will lead to an even greater weakening of the pound. Hence, investors had an additional incentive to turn to the already prosperous digital currency market in Turkey.
Specifically, between March 20-24, when the lira fell 10%, digital currencies worth 23 billion pounds ($2.8 billion) were traded, compared to 1 billion pounds in the same period last year. In total, during the period from the beginning of February to March 24, the volume of transactions in them reached 218 billion Turkish liras, or 26 billion dollars. After Agbal’s departure, there was an increase, as shown in the data of the digital market research company Chainanalysis, which came to the knowledge of the Reuters news agency. To make the change obvious, it is enough to think that in the same period a year ago the trading volume was only 7 billion pounds.
The jump is a reflection of growing international interest in digital currencies and from institutional investors such as banks and corporations – and that has pushed the value of bitcoin to record lows of just under $62.000. However, investors in Turkey said that the “weaker” lira and inflationary pressures as well as hopes for quick profits pushed them into it. “If my savings are in pounds, they lose value,” said Izzet Emre Ari, a 25-year-old computer engineer who started investing in cryptocurrencies two months ago.” “Sometimes I see his performance as a horse race,” he added, adding that he now has nearly $4.000 in his cryptocurrency account. The digital currency, due to its limited supply, is considered vulnerable to inflation, which in Turkey in February had approached 16% against 5% of the official target.