People’s Interest in Bitcoin soars as the Turkish lira falls to a 4-month low against the US dollar. The dismissal of the governor of the Central Bank could lead to the fall of the Turkish lira.
A few days ago, the pioneering cryptocurrency was trading up to 50% above its average value on P2P platforms in Turkey. The lira (TRY), Turkey’s national fiat currency, dropped by 10% after the removal of Naci Agbal, governor of the country’s Central Bank.
The above-mentioned situation led Bitcoin to trade above USD 60,000 and even up to USD 100,000 (equivalent to around TRY 700,000). That was its value on Turkish trading market LocalBitcoins, while it remained below USD 57,000 in the rest of the world.
Recep Tayyip Erdogan, President of Turkey, fired Naci Agbal, who had taken office in November 2020. Many people consider that he could have been the key to combat an inflation rate above 15% in the nation. His dismissal created a stir among local and foreign investors who praised the monetary policy of the Central Bank.
After a sharp drop in share prices tripped the circuit breakers, negotiations on the Istanbul stock exchange stopped. The USD dollar traded at TRY 7.18 per unit, representing a 10% drop, according to data from TradingView.
Concerns that the Central Bank’s governor might apply controls to curb the high rate of inflation in part led the lira to drop. The number of Bitcoin-related Google searches in Turkey indicates that the interest in Bitcoin gained momentum, increasing five times in a matter of hours.
Some people might want to take advantage of the moment of despair of users in the middle of a panic attack. There was a premium in the price of Bitcoin recorded in some of the announcements of the P2P market in Turkey. It seems to be that Bitcoin trading at prices above the average occurred in alternative offline markets.
Bitcoin Is a Store-of-Value against Inflation
The value of the Turkish lira has decreased by more than 50% in the last three years. Consequently, a growing number of citizens are turning their attention to Bitcoin for its limited and deflationary issuance. Something similar has happened in Venezuela and Argentina, which had the highest inflation rate in 2020. They were also prominent in their level of adoption of Bitcoin and other cryptocurrencies.
Analysts have also studied Bitcoin as a store-of-value asset against inflation. In this sense, data from Coin Metrics has indicated that there is no uncertainty in the monetary policy of Bitcoin. “One inherent property of Bitcoin is its predictable supply”, which it highlights amid the monetary policy that central banks control. These institutions deal with aspects that include the printing of money and the control of interest rates.
The pioneering cryptocurrency has even strengthened its position against gold as a store-of-value asset. Bitcoin has displaced the precious metal, whose price has fallen by more than 13.5% until now this year. During the same period, the price of Bitcoin has grown by more than 81%.
By Alexander Salazar
