Turkish Lira More Volatile than Bitcoin

According to the latest mainstream media reports, the Turkish Lira (TRY) is now more volatile than Bitcoin. In the last ten days, the price swings shown by the currency to the Dollar now are more extreme that those shown by Bitcoin.

Escalating Currency Crisis

Turkey’s currency volatility has only been getting worse since April last year, when the Turkish referendum, in which Recep Tayyip Erdogan was given sweeping authority in a constitutional overhaul that has been the most radical in the nation’s 93 year history as a republic.

And now, the latest price hike in the TRY comes after the United Stated imposed sanctions against Turkey last Friday, due to the fact that the country was still holding an American pastor in custody.

Because of the political upheaval in the country, the currency dropped to its lowest ever of 7.20 TRY against the US Dollar. Last week alone, the Turkish Lira dropped by 27%. And year-to-date, the TRY is down 80% against the dollar.

Bitcoin Becoming Safe Haven Asset

Thanks to the massive volatility in their country’s currency, the Turkish people are losing faith in the TRY and are now turning to Bitcoin as an alternative medium of exchange. Inflation is sharply up in the country and spending power of the TRY is rapidly declining, thereby pushing up Bitcoin’s appeal as a store of value.

Data from Google Trends shows that interest in Bitcoin in Turkey increased substantially in August and local cryptocurrency exchanges such as Btcturk, Paribu and Koinim have seen a massive 150% increase in trading volumes in Bitcoin in the last week alone.

The price of one Bitcoin is now 47,192 TRY, which is the highest it has been since January 21. In fact, according to the local exchanges, they are trading Bitcoin at $500 higher that other countries’ crypto platforms.

Since the beginning of this month, the price of Bitcoin has risen by 31% against the Turkish Lira, and is also up by 67% from the June 24 price of 26,337 TRY. In contrast, the price of Bitcoin against the dollar is up by only 12% from its June 24 price of $5,755.

Things Will Get Worse

According to market analysts, things are only expected to get worse in Turkey. President Erdogan continues to stand against appeals to increase interest rates to stabilize the Turkish Lira. Additionally, rather than backing down, the Turkish President is taking US President Trump’s new sanctions on steel and aluminum as an “attack” on his country’s economy.

And until there is more political stability in the country, things will continue to downslide, with the price of Bitcoin expected to rise even higher against the Turkish Lira.