The Turkish Lira fell against Bitcoin after data revealed very high annual inflation rates in February 2022. The lira is now hanging around a two-month low. This week, the Lira has lost almost 12% versus the world’s largest cryptocurrency. The Lira is presently trading at approximately 590,462 per Bitcoin. It has also lost around 7% against the dollar in the last week. Turkish inflation has risen dramatically since last year, owing primarily to President Tayyip Erdogan’s unconventional monetary policy, which saw the central bank lowering interest rates despite growing prices. Inflation has played a crucial role in eroding Turkish financial stability, driving the country’s people to protect their money with cryptocurrency. In February 2022, inflation reached a new high of 54 percent.
In the year 2021, at the time of the currency crisis, crypto trading on major Turkish exchanges surpassed 1 million daily deals. According to reports, this tendency appears to have maintained in the current year also.
In Turkey, the use of cryptocurrency as a method of payment is prohibited. However, investing in cryptos there as a tradeable asset is permitted. The rising popularity of digital assets, along with a huge exchange breakdown last year, has prompted the government to rush to write crypto-related legislation. According to a recent survey, Turkey has the largest volume of cryptocurrency transactions in the Middle East.
In recent times, nations having hyperinflation with a weak currency experienced a spike in crypto usage. The condition was seen in Venezuela after the bolivar fell and the economy sank in 2019. At the time Venezuela switched to cryptocurrencies, notably Bitcoin as well as the country’s own cryptocurrency, ‘Petro’.