The Turkish lira is at crisis point, and Turkish people are showing an increased interest in Bitcoin. Some see this as a sign of hope as the cryptocurrency market deflates across the board.
There’s been a MASSIVE 42% increase in visitors to https://t.co/OsFgRFRRZb from Istanbul as the Turkish Lira plummets. This is how Bitcoin takes over the world, not through ETF’s and “HODL”, but through replacing fiat currencies as they fall apart!
— Cøbra (@CobraBitcoin) August 13, 2018
Fighter planes and a pastor
The Turkish lira has devalued by 45 percent over this year, but the immediate crash is being attributed to sanctions imposed by the US on Turkey. Specifically, at the beginning of August, tariffs on Turkish steel and aluminium were doubled, a delivery of F-35 fighter jets was halted, and two government officials (justice minister Abdulhamit Gül and interior minister Suleyman Soylu) were blocked from using the US financial system.
These were punitive measures taken because Turkey refuses to pardon an American priest residing in Turkey, Andrew Brunson. He was arrested in October 2016 in the aftermath of the failed coup attempt against the Turkish government. He is accused of spying/attempting to overthrow the government/being a member of the Islamic Gülen movement, and his trial was described by a rights activist as a “farce”.
The Turkish finance minister, Berat Albayrak (Erdoğan’s son-in-law) said that the impact on the economy would be “limited”, but the charts tell a different story:
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The crash has had effects on other currencies and businesses worldwide; the euro, the Argentinian peso, South African rand, the Indian rupee and the Indonesian ringgit are all suffering, according to The Guardian.
Looking at two of Turkey’s cryptocurrency exchanges, Koinim, and BTCturk, we can see major increases in use.
42 percent is not that much
Cøbra is the Twitter account of the co-owner of Bitcoin.org, which is the closest thing the world has to an official Bitcoin website. 42 percent is not such a drastic change, but his comment on Bitcoin replacing fiat currency is the reason that crypto fans get so excited when a crisis happens:
An Istanbul-based marketing professional (pseudonym Bitmov) told CoinDesk:
“I started personally trading crypto 1.5 years ago because of the weakness of the Turkish lira, and fear of the political, and financial, status of the Turkish government. Cryptocurrency makes me feel much safer…If your national currency is falling like this … or you don’t trust centralized currencies and banks, what can you do? You should be your own bank, and I’m sure people all around the world will realize that soon.”
In reality, the price of Bitcoin has actually lost more value than the lira since 2017. The fact that this loss has come in tandem with the increased interest and involvement of financial institutions is perhaps a point that could be discussed.
What seems clear from the heated discussions that this crisis has inspired is that the idea behind cryptocurrency, the promise of financial independence from central governments, is still held by many.