Switching to crypto to avoid inflation makes sense , but will it affect a country 's currency ?
I don't think so because storing assets in bitcoin only benefits people, not countries, inflation will continue because the circulation of one country's currency is out of control from the manufacture and need of one country
Topic: Turks pile into Bitcoin and Tether to escape plunging lira (Read 179 times)
How easy is it to use BTC in Turkey? It's really great of you can put a lot of you money into something that is going to protect you against inflation.
If you meant getting in and out of bitcoin, it seems like it's just as easy as most places because they also have their own local exchanges. Tether just makes a lot more sense for the people who live paycheck to paycheck; despite the higher-than-normal inflation of the USD.
How easy is it to use BTC in Turkey? It's really great of you can put a lot of you money into something that is going to protect you against inflation.
It's just about pointless if you can't convert it back or spend it.
I don't know how it is over there, I know that here in the US with a little work I can do just about anything with BTC / crypto and if I am in a hurry and willing to take a bit of a hit I can always get it converted back to fiat. I also know in other parts of the world it's not that easy.
-Dave
It's just about pointless if you can't convert it back or spend it.
I don't know how it is over there, I know that here in the US with a little work I can do just about anything with BTC / crypto and if I am in a hurry and willing to take a bit of a hit I can always get it converted back to fiat. I also know in other parts of the world it's not that easy.
-Dave
Yeah, well. This is the never-ending story all over again. It has been going on for years, and with the occurrences of an enlightened man like Erdogan in power, I am not surprised that it continues to happen. What does surprise me a little is the stablecoin, which is new to me, but I see its logic. Apart from what mk4 says, I think that by using USDT they protect themselves both from inflation in their country and from market swings.
It is clear that the dollar, although it has inflation, has much less than the Turkish lira, so it is worth holding dollars (or stablecoins linked to them). The Bitcoin is an even better hedge against inflation than the dollar, so it is logical that many will exchange the shitty Turkish lira for Bitcoin. But as the price of Bitcoin is volatile, risk-averse people, or those who want to spend part of their savings in the short term, do not want to see it go down by 50%, even if it is clear to them that in the long term it will go up.
It is clear that the dollar, although it has inflation, has much less than the Turkish lira, so it is worth holding dollars (or stablecoins linked to them). The Bitcoin is an even better hedge against inflation than the dollar, so it is logical that many will exchange the shitty Turkish lira for Bitcoin. But as the price of Bitcoin is volatile, risk-averse people, or those who want to spend part of their savings in the short term, do not want to see it go down by 50%, even if it is clear to them that in the long term it will go up.
A few friends of mine from Turkey who are working internationally all are getting paid in USD or Euros. None of them really want to receive TRL because of the high inflation. They all studied abroad and probably had it much easier when negotiating their salaries. For the unlucky one who are stuck with the lira it's the best they can do to switch into crypto currencies. Getting larger amounts of USD or Euros is probably harder than just to buy cryptos on your own. The intermediate economic outlook for Turkey is not that good, inflation will likely keep rising. This will likely increase the people who buy cryptos.
This articles claims residents of turkey are using tether (USDT) as a hedge against native currency (lira) inflation. Someone correct me if I'm wrong. I don't think the world has seen much of tether or stablecoins being used as inflation protected assets to date. An unexpected circumstance given current concerns about US inflation.
It's pretty much the same with Venezuela — whereas some people held US Dollars because despite USD inflation, the Venezuelan bolívar was performing far worse than a typical shitcoin was performing in terms of value.
In this case with the stablecoin usage, it's probably just that there are far more crypto-native peeps in Turkey than in Venezuela.
Lira is going down to drain but the not-so-surprising fact is that people are using cryptocurrency as a hedge against their fallen fiat currency.
If it had happened 15 years ago, the Turks would have purchased gold or foreign currencies as a hedge but now crypto has emerged as a major hedge instrument. Same things happened last year during the protest in Hongkong against China.
If that trend continues, it could support bitcoin to maintain the price point due to increased demand.
If it had happened 15 years ago, the Turks would have purchased gold or foreign currencies as a hedge but now crypto has emerged as a major hedge instrument. Same things happened last year during the protest in Hongkong against China.
If that trend continues, it could support bitcoin to maintain the price point due to increased demand.
Quote
The rise of cryptocurrencies in recent years has presented a new group of instruments in which to store wealth, albeit far more volatile
The Turkish lira has become so volatile that Turks have ditched the local currency for assets with an even riskier reputation: cryptocurrencies.
While the lira unraveled against the dollar in the last quarter of 2021, cryptocurrency trading volumes using the lira leapt to an average $1.8 billion a day across three exchanges, according to blockchain analytics firm Chainalysis. Those volumes are still modest compared with the results of a 2019 survey by the Bank for International Settlements that found roughly $71 billion of lira transactions a day, but even so are more than any of the preceding five quarters.
Turks are particularly enamored of the stablecoin tether, whose value is pegged to the dollar. The lira this fall became the most traded government-issued currency against tether, outpacing the dollar and the euro, according to data provider CryptoCompare.
Turks have long weathered spells of economic turmoil by keeping their money in U.S. dollars, euros or gold. The rise of cryptocurrencies in recent years has presented a new group of instruments in which to store wealth, albeit far more volatile. Since September, the lira has lost 40% of its value against the dollar. Bitcoin initially jumped almost 40% against the dollar by early November, but is now down more than 10%.
In Istanbul, Turkey’s largest city and its commercial capital, ads for cryptocurrency exchanges appear on trams, billboards and one of the city’s two airports. Shops selling bitcoin have cropped up in the Grand Bazaar, tucked into alleys near where traders also sell foreign currency and gold.
President Recep Tayyip Erdogan plunged Turkey’s financial system into turmoil last fall with a push for repeated interest-rate cuts in the face of soaring inflation. The currency stabilized somewhat in recent weeks after a government bailout of savers, but local Turks remain wary.
"The senseless policies regarding rates, diminishing trust for published statistics regarding inflation and political decisions…made cryptos a safe haven, even though cryptos are rather risky and volatile financial assets," said Kağan Şenay, a 27-year-old trader in Bursa in northwest Turkey.
Mr. Şenay said he began trading bitcoin in 2017 to make extra money. Increasingly, he has also seen it as a way to protect his lira income from inflation. The buying power of the lira he earns from his job at a fabric producer has diminished alongside higher prices.
Turks have embraced cryptocurrencies despite an official ban introduced last year on their use as a form of payment in the country. The ban, which was unveiled without warning, "created a traumatic experience in the Turkish cryptocurrency community," said Turan Sert, an adviser to Turkish cryptocurrency exchange Paribu. The government has promised a new cryptocurrency law will soon be sent to the country’s parliament, but there are few details of what its impact will be, according to Mr. Sert.
Cryptocurrencies have grown in popularity in Turkey and parts of the developing world where distrust of government economic policies is high. Nigerians use bitcoin for payments after currency devaluations and tight control over access to foreign currencies. El Salvador last year became the first nation to recognize bitcoin as legal tender, after two decades of having its economy tied to the U.S. dollar.
In Turkey, part of the distrust extends beyond the lira. Two-thirds of Turkey’s banking deposits are foreign currencies, mostly dollars and euros. Turkish banks lend out some of those dollars to the central bank and the government, which has used them to intervene in foreign-exchange markets in an unsuccessful battle to prop up the lira.
If there was a rush to withdraw dollars, Turkish banks would need to get some of those dollars back to meet depositors’ needs, and there is some question whether the government could source the dollars. In a worst-case scenario, some fear the government could force banks to convert dollar deposits into lira.
That is pushing some to exchange bank-held dollars and cash dollars for what are known as stablecoins, cryptocurrencies whose value is pegged to traditional currencies such as the dollar, according to several Turkish savers. More than half the trades against the lira in December involved tether, Chainalysis said.
Stablecoins such as tether are also used as a gateway to trade in and out of positions in more volatile coins such as bitcoin and ether. Turkish crypto exchange Bitlo experienced a pickup in the number of new traders last quarter as the lira’s value cratered, said Esra Alpay, the firm’s chief marketing officer.
"The Turkish lira’s volatility and rising inflation seen in recent months has led our investors to see cryptocurrency as a profitable investment in the long term and as a hedge against inflation in the short term," she said.
Ege Tuluay, a 24-year-old student training to be a seafarer, walked into Caspicoin, a crypto shop in the Grand Bazaar, on Monday to check on the commission for buying tether with his U.S. dollar savings. He plans to use the tether to buy other cryptocurrencies.
"Cryptocurrencies offer hope for Turkish people because they are broke, so they want to make money. It seems to be easy money for Turkish people," he said.
https://www.foxbusiness.com/economy/turks-pile-bitcoin-tether-escape-plunging-lira
The Turkish lira has become so volatile that Turks have ditched the local currency for assets with an even riskier reputation: cryptocurrencies.
While the lira unraveled against the dollar in the last quarter of 2021, cryptocurrency trading volumes using the lira leapt to an average $1.8 billion a day across three exchanges, according to blockchain analytics firm Chainalysis. Those volumes are still modest compared with the results of a 2019 survey by the Bank for International Settlements that found roughly $71 billion of lira transactions a day, but even so are more than any of the preceding five quarters.
Turks are particularly enamored of the stablecoin tether, whose value is pegged to the dollar. The lira this fall became the most traded government-issued currency against tether, outpacing the dollar and the euro, according to data provider CryptoCompare.
Turks have long weathered spells of economic turmoil by keeping their money in U.S. dollars, euros or gold. The rise of cryptocurrencies in recent years has presented a new group of instruments in which to store wealth, albeit far more volatile. Since September, the lira has lost 40% of its value against the dollar. Bitcoin initially jumped almost 40% against the dollar by early November, but is now down more than 10%.
In Istanbul, Turkey’s largest city and its commercial capital, ads for cryptocurrency exchanges appear on trams, billboards and one of the city’s two airports. Shops selling bitcoin have cropped up in the Grand Bazaar, tucked into alleys near where traders also sell foreign currency and gold.
President Recep Tayyip Erdogan plunged Turkey’s financial system into turmoil last fall with a push for repeated interest-rate cuts in the face of soaring inflation. The currency stabilized somewhat in recent weeks after a government bailout of savers, but local Turks remain wary.
"The senseless policies regarding rates, diminishing trust for published statistics regarding inflation and political decisions…made cryptos a safe haven, even though cryptos are rather risky and volatile financial assets," said Kağan Şenay, a 27-year-old trader in Bursa in northwest Turkey.
Mr. Şenay said he began trading bitcoin in 2017 to make extra money. Increasingly, he has also seen it as a way to protect his lira income from inflation. The buying power of the lira he earns from his job at a fabric producer has diminished alongside higher prices.
Turks have embraced cryptocurrencies despite an official ban introduced last year on their use as a form of payment in the country. The ban, which was unveiled without warning, "created a traumatic experience in the Turkish cryptocurrency community," said Turan Sert, an adviser to Turkish cryptocurrency exchange Paribu. The government has promised a new cryptocurrency law will soon be sent to the country’s parliament, but there are few details of what its impact will be, according to Mr. Sert.
Cryptocurrencies have grown in popularity in Turkey and parts of the developing world where distrust of government economic policies is high. Nigerians use bitcoin for payments after currency devaluations and tight control over access to foreign currencies. El Salvador last year became the first nation to recognize bitcoin as legal tender, after two decades of having its economy tied to the U.S. dollar.
In Turkey, part of the distrust extends beyond the lira. Two-thirds of Turkey’s banking deposits are foreign currencies, mostly dollars and euros. Turkish banks lend out some of those dollars to the central bank and the government, which has used them to intervene in foreign-exchange markets in an unsuccessful battle to prop up the lira.
If there was a rush to withdraw dollars, Turkish banks would need to get some of those dollars back to meet depositors’ needs, and there is some question whether the government could source the dollars. In a worst-case scenario, some fear the government could force banks to convert dollar deposits into lira.
That is pushing some to exchange bank-held dollars and cash dollars for what are known as stablecoins, cryptocurrencies whose value is pegged to traditional currencies such as the dollar, according to several Turkish savers. More than half the trades against the lira in December involved tether, Chainalysis said.
Stablecoins such as tether are also used as a gateway to trade in and out of positions in more volatile coins such as bitcoin and ether. Turkish crypto exchange Bitlo experienced a pickup in the number of new traders last quarter as the lira’s value cratered, said Esra Alpay, the firm’s chief marketing officer.
"The Turkish lira’s volatility and rising inflation seen in recent months has led our investors to see cryptocurrency as a profitable investment in the long term and as a hedge against inflation in the short term," she said.
Ege Tuluay, a 24-year-old student training to be a seafarer, walked into Caspicoin, a crypto shop in the Grand Bazaar, on Monday to check on the commission for buying tether with his U.S. dollar savings. He plans to use the tether to buy other cryptocurrencies.
"Cryptocurrencies offer hope for Turkish people because they are broke, so they want to make money. It seems to be easy money for Turkish people," he said.
https://www.foxbusiness.com/economy/turks-pile-bitcoin-tether-escape-plunging-lira
....
Summary:
Quote
While the lira unraveled against the dollar in the last quarter of 2021, cryptocurrency trading volumes using the lira leapt to an average $1.8 billion a day across three exchanges, according to blockchain analytics firm Chainalysis.
One wonders if these circumstances could have a current stabilizing or bullish effect on bitcoin prices.
This articles claims residents of turkey are using tether (USDT) as a hedge against native currency (lira) inflation. Someone correct me if I'm wrong. I don't think the world has seen much of tether or stablecoins being used as inflation protected assets to date. An unexpected circumstance given current concerns about US inflation.
While inflation is a sad thing I hope no one has to experience. It does appear to have a bullish effect on bitcoin and cryptocurrencies in general.
Jump to: