Bitcoin Demand in Turkey Still Grows as Currency Crisis Continues

The Turkish Lira (TRY) continues to lose ground on Monday. This led most stock markets modestly lower ahead of the US open, where confidence was regained, at least in early trading. As the crisis worsens, some people in Turkey are turning towards cryptocurrencies, as they seem to be a viable alternative despite being volatile markets themselves.

While the Lira has been under pressure for months and has lost as much as 40% against the US dollar since the beginning of the year, the last few days have been very intense. We covered the situation last week, but at one point on Monday a dollar was worth more than 7 (seven) TRY. Here is an illustration of the recent price action:

Charting by TradingView A Bloomberg article demonstrated that Bitcoin is less volatile than the Lira over the last ten days, stating, “The 10-day swings in the lira relative to the U.S. dollar now exceed those for Bitcoin amid Turkey’s escalating currency crisis”.

The situation has caused people to run for safer assets, with gold and Bitcoin being two of the main contenders. Bitsheap and Koinim, two of the popular Turkish cryptocurrency exchanges, saw their volumes tripled overnight:

Illustration by Coinmarketcap 

The dire situation raises a few questions, and one of the most is important ones is that of a potential spillover to other markets. Most economists have a rather negative sentiment, with Ran NeuNeu, founder of ONCHAIN CAPITAL and host of CNBC Africa’s Cryptotrader adding this:

Emerging market currencies collapsing on the back of the move by the Turkish lira! I would have expected more inflow into a decentralized asset.Ran NeuNer (@cryptomanran) 11:47 PM - 12 Aug 2018