How Turkish Currency Lira's Crisis Is A Gain For Its Crypto Industry

In what can be seen as a silver lining amidst the currency crisis which Turkey is facing, it＊s crypto industry is seeming to pick up and in fact gain from the ongoing crisis.

Over the past few years, the interest in crypto among Turks, just like the rest of the world, has increased.

But contrary to what one may expect in a country hit by currency crisis, Turkey＊s economic crisis has actually further pushed millions of curious observers to put their savings into Bitcoin, Ethereum and other crypto coins.

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The Twin Blows Of Rising Inflation & Lira＊s Nosedive

The new crypto investors aren＊t just drawn to the investment promise of cryptocurrencies but they in fact see virtual currencies as a potential store of value to shield their savings, in a scenario wherein the country＊s currency Lira has nosedived, losing more than 40% of its value last year alone.

And that＊s not all. Last month (December 2021) saw Turkey＊s inflation hit a 19 year high of 36% year on year, according to official data from the Turkish Statistical Institute.

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Turkey＊s Manifestation For Reliable Investments

This growing appetite for cryptocurrency amongst Turks seems to be the latest manifestation of the public＊s search for reliable investments, as per NakitCoins＊ founder.

NakitCoins is Turkey＊s first physical cryptocurrency-cash service exchange, which allows buying or selling of cryptocurrency easily.

Today, most of NakitCoins customers today are foreigners, because current regulation in Turkey makes it difficult to operate with cash in Turkish Lira directly.

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Turkey＊s Crypto Ban

Last year in March 2021, daily transactions in crypto in Turkey had topped 1 million, according to Chainalysis and Kaiko data which was seen by Reuters.

That surge came after the currency Lira was disturbed in the wake of Turkish President Recep Tayyip Erdogan＊s surprise sacking of the country＊s central bank chief in March 2021.

Then in April 2021, the central bank announced it was banning the use of Bitcoin and other cryptocurrencies for payments.

Later that month, two Turkish cryptocurrency exchanges 每 Thodex and Vebitcoin 每 collapsed, wiping out the holdings of hundreds of thousands of users.

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The Crypto Comeback

The crypto craze came back in Turkey during the final months of 2021, with trading volumes topping 1 million per day, after the central bank announced a series of interest-rate cuts in the face of soaring inflation that saw the Lira＊s value come crashing down.

Even Turkey's billboards and television spots have increasingly advertised ways for the public to enter the crypto market. And on most television channels, up-to-date values of Bitcoin are listed alongside the United States dollar and the euro.

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Crypto Use Base Grown From 1.5 Million To 5 Million in 2021

Turkey＊s largest online crypto exchange Paribu, which allows Turks to use their bank accounts to buy and sell crypto in Turkish currency Lira, has reportedly seen its user base grow from around 1.5 million at the starting of 2021 to 5 million by year＊s end, with average daily trading volume swelling from $20m a day in 2020 to more than $500m by the end of 2021!

And besides local exchanges, even global exchanges like Binance and Coinbase also operate in Turkey.

Now it remains to be seen whether the crypto craze continues to surge in Turkey , especially amidst the ongoing currency crisis.

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