Turkey embraces Bitcoin when inflation reaches 24 years high
Turkey’s inflation rate has reached its highest level in 24 years, with the annual inflation rate now at 78.62%. The Turkish Statistical Institute published the figure, with the monthly increase of 4.95%.
There are several reasons why the inflation rate has risen to such an astronomical figure, including the rising energy costs and the weakened Turkish lira. Other countries have also experienced similar rises in inflation, with the European Central Bank set to raise interest rates for the first time in 11 years.
Turks turn to BTC as an inflation hedge
While the lira has weakened, the amount of BTC volume on LocalBitcoins in the region has grown significantly. BTC peer-to-peer trading volumes in the first quarter and second quarter of 2022 have seen massive increases compared to the fourth quarter of 2021.
In the first quarter of 2022, LocalBitcoin’s trading volume increased by 51% compared to the fourth quarter of 2021, while trading volume for the second quarter of 2022 increased by 40%. These are significant increases that indicate that the public is resorting to cryptocurrency to protect their financial positions.
In the midst of all this economic unrest, the Turkish government is resorting to various measures. But still, all demographics turn to crypto, and neither age nor gender influences the decision to invest in crypto.
Turkish government resorts to gold savings
Turkish President Recep Tayyip Erdoğan has expressed his reluctance to raise interest rates, calling the interest rate an evil mother. This has led to the decline of the Turkish lira, and the country may have to take drastic measures to address the problem.
To fight inflation, the government has unveiled a scheme that will bring gold savings at home into the banking system. The gold conversion deposit account will offer risk-free income, says the government. It estimates that there is about $ 250 to $ 350 billion in gold in homes.
Turkey banned crypto payments in 2021, but that does not seem to have stopped its citizens from investing in it purely as an asset class. Should the fight continue, it will only be more likely that crypto investments will grow. Individuals have often turned to crypto as a hedge against inflation, even though that argument seems to be losing its strength.
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