{"id":119212,"date":"2021-03-31T13:12:12","date_gmt":"2021-03-31T13:12:12","guid":{"rendered":"https:\/\/precoinnews.com\/?p=119212"},"modified":"2021-03-31T13:12:12","modified_gmt":"2021-03-31T13:12:12","slug":"turkeys-slumping-lira-adds-fuels-to-crypto-trading-boom","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/markets\/turkeys-slumping-lira-adds-fuels-to-crypto-trading-boom\/","title":{"rendered":"Turkey's slumping lira adds fuels to crypto trading boom"},"content":{"rendered":"
ISTANBUL (Reuters) – The Turkish lira\u2019s dramatic slump has added fuel to a surge in cryptocurrency trading in the country, data showed, with investors hoping to both gain from bitcoin\u2019s rally and shelter against inflation.<\/p> Turkey\u2019s currency has lost over 13% since President Tayyip Erdogan fired central bank Governor Naci Agbal<\/p>\n earlier this month, stoking fears of looser policy and rising price pressures that could erode the lira\u2019s value.<\/p>\n The aftermath of the Agbal\u2019s sacking accelerated an already growing boom in Turkey\u2019s crypto market.<\/p>\n Trading volumes between the start of February and March 24 hit 218 billion lira ($26 billion) with a spike on the weekend of Agbal\u2019s ouster, data from U.S. researcher Chainalysis shared with Reuters showed, surging from a little over 7 billion lira in the same period a year earlier.<\/p>\n The jump echoes soaring global interest in crypto, driven by bitcoin\u2019s rally to a record of just under $62,000 as major investors and companies embraced the emerging asset.<\/p>\n Yet investors in Turkey said a weaker lira and inflation pressures, as well as hopes of quick gains, have driven demand.<\/p>\n Many of them shrugged off the volatility of cryptocurrencies, which financial watchdogs across the world have warned could lead to investors losing their money.<\/p>\n \u201cIf my savings are in lira, they are losing value,\u201d said Izzet Emre Ari, a 25-year-old computer engineer who started investing in crypto two months ago.<\/p>\n \u201cSometimes I watch its performance like a horse race,\u201d said Ari, who has added savings to his crypto account now holding some $4,000.<\/p>\n (Graphic: Turkey’s taste for crypto – )<\/p>\n Bitcoin\u2019s march to record highs has come as governments and central banks open the stimulus taps to counter the economic damage caused by the COVID-19 pandemic.<\/p>\n A narrative that its limited supply makes it impervious to inflation – bitcoin is often seen as a store of value, despite its volatility – has partly fuelled its gains.<\/p>\n In Turkey, inflation jumped more than expected to nearly 16% in February, well above a 5% target.<\/p>\n Turkish residents and businesses have long piled into gold and foreign currencies to shield themselves from lira wobbles, with dollarisation near record highs.<\/p>\n \u201cTurkish people like stable assets due to our history of high inflation,\u201d said Ozgur Guneri, CEO of cryptocurrency exchange BtcTurk, which attracted over a million new users between January and March. \u201cThat is why generation after generation of Turks invested in gold, real estate and dollars.\u201d<\/p>\n Between March 20-24, when the lira tumbled 10% after the central bank governor\u2019s sacking, crypto worth 23 billion lira ($2.8 billion) was traded, the data showed, versus 1 billion lira in the same period last year.<\/p>\n Turkish Google searches for cryptocurrency hit a record high in the week before the sacking.<\/p>\n Analysts said investors bought stablecoins, designed to avoid the volatility of bitcoin, on the weekend of the ouster before converting to dollars when forex markets reopened.<\/p>\n Trading volumes of Tether, a major stablecoin, hit 2.2 billion lira ($265 million) on the weekend of March 20-21, versus around 39 million lira a year earlier, data showed.<\/p>\n \u201cCrypto exchanges are open 24\/7,\u201d said Altug Isler, an analyst and founder of the Kripto Teknik website. \u201cA lot people bought Tether that weekend, preparing for Monday.\u201d<\/p>\n (Graphic: Turkish online interest in crypto – )<\/p>\n (This story fixes spelling of former Central Bank chief in paragraphs 2,3,4)<\/p>\nSPIKING INFLATION<\/h2>\n