The Wall Street Journal (WSJ), an American business-focused, English-language international daily newspaper, reported on January 12th that Turkish people are beginning to invest heavily in cryptocurrencies as the value of their currency, the lira, continues to fall sharply.
According to Chainalysis, a blockchain analysis company, the daily average of cryptocurrency transactions using lira has increased to $1.8 billion USD on average based on three cryptocurrency exchange marketplaces: Binance, BTC Turk, and LocalBitcoins.
This is a small amount in dollar terms compared to the daily $71 billion traded in USD reported by a Bank for International Settlements (BIS) survey in 2019, but still higher than at any other time in the last five quarters, the WSJ explained.
Turks, in particular, have bought a lot of Tether, a stablecoin (a virtual currency whose value is fixed to a fiat currency such as the US dollar).
According to CryptoCompare, a cryptocurrency information provider, the lira overtook the dollar and euro to become the most traded currency with Tether last fall.
Even though Turkish authorities banned the use of virtual currency as a payment method in April 2021, the reason Turks are buying virtual currency is interpreted to be for a measure of financial security as inflation continues to soar in Turkey and the value of the lira continues to plummet.
Turkey’s inflation rate in December 2021 was 36%, ranking the highest in inflation among the Organization for Economic Cooperation and Development (OECD) member countries for the same period.
The lira has fallen 40% against the US dollar since September 2021.
The value of the lira has stabilized somewhat since Turkish President Recep Tayyip Erdogan announced in December that he would protect lira deposits. However, the WSJ analyzed that Turkish people’s distrust of the lira also contributed to the trend toward virtual currency.
Two-thirds of Turkish commercial bank deposits are now in foreign currencies, mostly US dollars or euros. However, the Turkish government also borrows dollar deposits from these banks and uses them to support the value of the lira.
If Turks demanded to withdraw all their money from the banks all at once, then Turkish banks would have to hold the dollar-denominated deposits.
Considering the worst case scenario, Turkish authorities could take measures that force banks to deny withdrawals of hard currency, the possibility of which has led Turks to trust more in virtual currencies like stablecoins.
Source: Yonhap News
35 And when the men of that place recognized Him, they sent out into all that surrounding region, brought to Him all who were sick,
36 and begged Him that they might only touch the hem of His garment. And as many as touched it were made perfectly well.
(Matthew 14:35-36 NKJV)
As the value of the lira continues to plummet, it has become harder for the Turkish people to sustain their normal lives. In this situation, Turks are purchasing cryptocurrencies to seek stability, but it is all just temporary security. Financial security cannot provide a fundamental solution to the real problem of their mortality.
Good God, You heal the sick and reveal Yourself to those who seek You desperately. Lord, would You heal all the pain of the people of this land who are crying out in despair. Let them be restored, not through any means of the world, but through the cross of Christ alone.
As their society seems to be falling apart, and their situation only seems to get worse, we believe that You are already raising up Your remnants from this land. May the Turkish church rise with the global church to proclaim the name of Jesus upon this land, that this people may be delivered from their chaos and sorrow in Jesus’ name! Lord, meet those who are crying out for salvation! Let them reside in the true peace that can only come from God.
Then, may Your salvation be proclaimed from Turkey to the ends of the earth! Amen!