The Turkish Lira has so far plunged by 32% to the US Dollar since January 2019 as the economic problems in Turkey snowball and continue to get out of hand.
Max Keiser, a Bitcoin evangelist, and a Crypto enthusiast is foreseeing a scenario where Turks will be turning to Bitcoin to cushion their financial portfolios from the falling Lira’s effect.
He reveals this projection in a tweet where he points out that the scarcity of hard currencies in Turkey, following unorthodox means by the country’s authoritarian leadership of President Recep Tayyip Erdogan to control the supply of money in the country, as one of the factors that could spur Bitcoin adoption in the nation of more than 80 million people.
Turkey Is One Of The Leading Bitcoin Markets Globally
Keiser’s projection is supported by credible evidence from the Cryptocurrency market that shows that the Turkish Lira is the fifth most used fiat currency in Bitcoin investment. This means that Turks are increasingly turning to BTC as an asset of choice.
Other national currencies that are ahead of the Lira in Bitcoin trading volume are the US Dollar, the Japanese Yen, the Korean Won, and the EU Euro. Surprisingly, the Lira is ahead of the Canadian Dollar and the British pounds that are the national currencies of Canada and the UK that have strong and wealthy economies.
Turkey’s Monetary Policies Are Creating Uncertainties
Turkey’s monetary policies are causing jitters in the country as it is becoming more certain that the future of the nation’s economy is headed for tougher times. For instance, the Central Bank of Turkey has loosened the monetary policy by reducing the repo auction rates by 150 basis points in a bid to spur economic activities through the economic expansionary approach.
However, this approach is sparking fears of increased inflation in the country which could erode people’s Lira-held wealth triggering a rush for Bitcoin as its long-term prospect is promising a higher ROI.
Unstable Political Environment
Turkey has a prolonged electioneering period that is pitting president Recep Tayyip Erdogan’s APK party against an energized opposition. In a bizarre twist of events, the ruling party lost the election in leading cities only for the election of an opposition Istanbul mayor to be overturned because of irregularities and corruption which the opposition denies.
Additionally, increasing opposition to the dictatorial leadership of the president, waning support of the APK party especially in leading cities such as Ankara, and a political ideological shift are setting the country on the path of economic turmoil that could exacerbate the already dire situation.
Macroeconomic Hazards On The Rise
Since the beginning of the year, there is a high year-over-year inflation rate in the country that peaked at 25.54% before slowing down to 19.5% in April 2019. Additionally, the unemployment rate is at a decade high of 14.7% and the outlook indicates that the figures are only set to get worse.
Therefore, according to Keiser Report host on RT, there is a growing appetite for more stable currencies and assets in the country.
As the US Dollar and Euro pairs remain popular and easy to acquire, Bitcoin is increasingly being bought as its bullish momentum in 2019 is a pointer to long term financial viability that every Turk wants to cash in.