Can Bitcoin Save The Turks?

For the past three months, the Turkish lira (Turkish national currency) has been in freefall and has lost approximately 35% against the US dollar. This is due to President Trump’s controversial policies and decisions. The latest result was a 15% daily decline against USD.

Recep Erdogan declared war on Bitcoin in September. He wanted to make it easier for the implementation of the digital lira. Turkey has experienced significant economic setbacks since then, and the price of the primary cryptocurrency has risen by almost 40%. MicroStrategy’s Michael Saylor advised locals that they convert their fiat currencies into bitcoin to avoid the financial chaos within their country.

Turkey Financial Crisis Worsens

Turkey’s financial situation is very worrying. The main problem stems from the collapse of the Turkish Lira. It plunged to an historic low of 13.44 against the dollar on November 23. This was a 15% decrease in a single day.

Inflation is the main cause of this decline, currently at 20%. Turks, a nation of 85 million people, have seen their basic goods and services rise in price while their local currency wages have been severely devalued.

Inflation rose due to the COVID-19 pandemic, as well as some of the controversial government policies. For example, the US has seen an increase in inflation of almost 6% due to the mass printing of the US dollars. However, the situation in Turkey is far worse.

A national currency losing its value every day could lead to further problems for the state in fighting the pandemics and restoring its economy.

Concerning the coronavirus it is important to note that this country is among the most severely affected by the virus. There have been a lot of deaths and new cases. More than 75,000 people have died so far. Nearly 30,000 new cases are reported every day.

Apple temporarily stopped online sales within Turkey due to the severe economic and health crisis. These services will not be restored by Apple at this time.

Erdogan’s Contentious Laws

Many believe that President Erdogan’s controversial orders and financial chaos were the root of this financial chaos. Bluebay Asset Management Senior Emerging Markets Strategist Tim Ash is one of them:

“Insane where the lira is, but it’s a reflection of the insane monetary policy settings Turkey is currently operating under.”

After President Erdogan doubled down his rate-cutting policy in order to win the “economic war for independence,” the 15% drop in the lira to the dollar was a result of these aggressive cycles that aim to increase trade, investment in the region and job creation. However, the opposition parties have reacted strongly to Erdogan’s actions.

Turkey and Bitcoin

The local government banned cryptocurrency investors from using their holdings to pay for payments in April 2021. They were also forbidden from using digital assets in any way, “directly or indirect” for payment services and electronic money issuance.

The restrictions did not discourage locals from using cryptocurrencies. In fact, they had the reverse effect and Bitcoin Google searches in the country reached an all-time high.

Erdogan declared war on Bitcoin in September. He followed his authority and wanted to open the way for a central bank to issue digital currencies. This would be completely controlled by the government.

“We are in a war against Bitcoin,” he said back then. “Because we will continue on the road with our money, which is our fundamental identity in this matter.”

Similar to April’s events, interest in alternative coins and bitcoin soared as the Turkish lira fell against the dollar and other national currencies. The bitcoin price rose to an all-time high. Even though it has slightly retraced since then, it is still ahead of the greenback. However, the lira remains far behind.

If you want to “Thrive”, embrace Bitcoin

Turkey’s local currency and Turkey might be in a difficult financial situation, but bitcoin could help them get on their feet again. Michael Saylor, MicroStrategy CEO and prominent BTC bull, recently stated that this is exactly what he meant.

Saylor has not hesitated to voice his opinions on macroeconomic issues. He praised El Salvador’s recent decision to accept Bitcoin as a legal currency not long ago.

Saylor is an expert on how to convert a large portion of his capital or that of his company into bitcoin. His BTC stash and MicroStrategy holdings are currently worth more than $5 Billion.