Turkey and its financial stability are among the hottest topics in the financial world, recently, as Turkey’s national currency – the Lira, is a subject of immense inflation and 40% devaluation since September.
Many Turkish citizens began to look at different alternatives to the Lira and cryptos may be the way to go, according to data from Chainalysis and Kaiko. However, according to Reuters, the initial flip towards cryptocurrencies began when the central bank chief was replaced, which caused the first Lira downfall.
Meanwhile, the decision of Turks to migrate towards cryptocurrencies seems completely logical, since the Lira lost 90% of its value since 2008 and cryptos have become a safe haven to protect people against economic turmoil.
In terms of preferred cryptos, most Turks have been leaning towards Bitcoin and Tether, as the Lira is continuing its plunge, as $1 is worth 12.37 Lira currently, from 7.37 Lira per USD at the start of 2021.
Furthermore, a total of 16% of the world’s crypto users came from Turkey, making them the fourth biggest country in the number of users.
The Turkish ordeal with cryptocurrencies was fueled by Turkey’s central bank banning cryptos for payments in April 2021.
Turkey’s plans of coming out of inflation include a rescue plan to encourage Turks to put their money back into the failing currency, announced by President Recep Tayyip Erdogan on December 21. It did push the Lira up, but not significantly.
Furthermore, the Turkish government noted that it would guarantee returns on Lira deposits at similar rates to those on foreign currencies. In order to do so, Turks would need to deposit Lira in fixed accounts, and the government would make up any differences it lost against the dollar.
The Turkish ordeal may have been pushing the entire crypto market, as the total crypto market cap increased by 1.8% over the past 24 hours, clocking in at $2.43 trillion.