Bitcoin was designed during the time when the 2008 economic crisis was in full swing. The reason why Bitcoin was made by Satoshi Nakamoto is to safe keep assets free from any third party’s influence. Fast forward to today, cryptocurrencies have evolved.
There are countries that even developed their own cryptocurrency. Iran and Venezuela are two countries that have attempted to make their own cryptocurrencies just to circumvent sanctions by the US and the international community. As for countries such as Venezuela, cryptocurrencies such as Dash and Bitcoin have both become popular especially as the country is dealing with hyperinflation.
And now, it seems that Turkey is yet another country that is slowly transitioning towards cryptocurrencies. Trading volumes on Turkey exchanges surged in the last few days after the currency crisis materialized. Turkey’s largest exchange Koinim, experienced a 63% increase in Bitcoin’s trading volume while BTCTurk and Paribu exchanges reported having their trading volume up by 35% and 100% respectively.
Easier to Buy and Sell Cryptos
Turkey is quite different compared to Iran. Iran imposed a ban on cryptocurrencies consider that people preferred using these digital currencies over their own currency. As for Turkey, investors don’t have to turn to peer-to-peer exchanges but instead buy from local exchanges that have often times worked with Turkish banks.
Treasury Secretary Steven Mnuchin on Thursday evening announced that the US is looking to impose fresh sanctions on Turkey if President Erdogan doesn’t give in to the request of the US to free imprisoned American pastor Andrew Brunson.
He said that “We have more that we’re planning to do if they don’t release him quickly”. However, he didn’t elaborate what the US is actually willing to do.
Brunson is a pastor who is a long time resident of Turkey. Turkish authorities accuse him of having links with the outlawed Kurdistan Workers Party and the Gulenist movement. Both of these groups have been allegedly involved in the failed coup attempt against President Erdogan in 2016.
Dispute on Tarriffs
However, one of the main reasons for the decline in value of the Lira is the escalating dispute between Turkey and US President Trump. The reason for this conflict is the tariffs on Turkish steel and aluminum. Because of this, Turkish lira lost 20% of its value against the dollar last week. It has created new lows and the lira is down by 45% so far this year against the dollar.
According to Erdogan, he believes that the high-interest rate and the recent plunge in the value of Lira are a work of a foreign operation. He also addressed Turkish citizens to exchange dollars, euros, and gold in order to strengthen the lira temporarily.
Is Turkey on the verge of becoming another Venezuela where people trust cryptocurrencies more than their very own currency? Can we expect things to get worse now that the US is looking to impose new sanctions? This simply means trouble for the country now that the inflation rate in Turkey is at a 14-year high and is close to 16%.