This week the Turkish Lira has continued its spectacular decline, losing an additional 20% against the dollar on Friday and dropping further at the beginning of this week. Despite a bounce over the last 24 hours, Recep Tayyip Erdoğan’s beleaguered currency has clocked up a drop of some 45% during 2018 alone, taking it to historic lows against the dollar. Turkey has joined the ranks of Venezuela, Iran and India as one of the world’s leading fiat calamities of 2018. And as in those unfortunate countries, increasing numbers of residents have begun investing in crypto in the search for a safe financial haven amidst the chaos.
Reports suggest dramatic spikes in crypto investment in Turkey over recent weeks, which appear directly attributable to the financial crisis in the country. Leading exchange Koinim have reported a 63% rise in BTC volume, BTCTurk a rise of 35%, and Paribu a near-doubling of volume since the collapse in the Lira. The number of exchanges in the country is also growing quickly to meet the extra demand. Unlike in Iran, crypto trading isn’t outlawed in Turkey, so opportunistic local businessmen can easily capitalize on the fast-developing situation.
The collapse in the value of the Lira, catalyzed primarily by Trump’s position over the tariffs applied to Turkish steel and aluminium, shows little sign of slowing. Although there has been some let-up in the collapse today, the Turkish government seem unwilling to take the measures required to bring calm to the markets. Erdoğan has attacked those who he describes as the “economic terrorists” responsible for the collapse and refuses to raise interest rates, instead urging his citizens to convert what dollars and euros they have into Lira to support the ailing currency. If today’s news reports are any guide, he may find quite the opposite occurs.
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