The dramatic fall of the Turkish pound in recent weeks has given new impetus to cryptocurrency trading, as investors hope to profit from the recent rally and protect themselves from rising inflation, according to Reuters.
The Turkish currency has lost more than 13% since the sudden ousting of the country’s central banker, Naci Agbal, by President Erdogan. Agbal’s dismissal accelerated the explosion of cryptocurrency trading in Turkey.
In particular, trading volume from early February to March 24 climbed to 218 billion pounds ($ 26 billion) with a sharp increase over the weekend of Agbal’s dismissal, according to Chainalysis, Reuters reports. In the corresponding period last year, the volume of transactions had just exceeded 7 billion pounds.
The jump reflects the huge global appetite for cryptocurrencies, following the recent rally of bitcoin to a new record high of $ 62,000 as large investors and businesses turn to cryptocurrencies.
Investors in Turkey, however, say the weaker pound and inflationary pressures, as well as hopes for a quick profit, have led to a surge in demand.
Many are even unaware of the increased volatility in cryptocurrencies, which, as financial authorities in many countries have warned, could lead to major losses.
“If my savings are in pounds, they lose value,” said Izzet Emre Ari, a 25-year-old computer engineer who started investing in cryptocurrencies two months ago. “Sometimes I watch the odds like a race,” he adds.
In Turkey, inflation exceeded estimates, approaching 6% in February, against the official target of 5%.
Citizens and businesses in Turkey are also turning to gold and foreign exchange to protect themselves against large fluctuations in the pound.
“Turks like fixed assets because of our history of high inflation,” said Ozgur Guneri, CEO of the BtcTurk exchange, which attracted more than 1 million new users between January and March. “This explains why one generation after another is investing in gold, real estate and dollars.”
Between March 20 and 24, when the pound plunged 10% in the aftermath of the central banker’s dismissal, cryptocurrency trading reached 23 23 billion ($ 2.8 billion), up from 1 1bn a year earlier.
Tether trading volume reached 2 2.2 billion ($ 265 million) on March 20-21, up from 39 39 million a year earlier.
“Exchanges are open 24/7,” said Altug Isler, analyst and founder of Kripto Teknik. “A lot of people bought Tether that weekend, [της απόλυσης του κεντρικού τραπεζίτη]».