With Lira down nearly 40% since September, crypto trading has gained popularity in Turkey. The inflation-stricken Turkey has been recording over one million crypto trades per day. This was first observed in March when President Tayyip Erdogan unexpectedly dismissed the country’s central bank governor. As a counter effect, the country’s currency lira plunged more than 10%.
According to data by Chainalysis and Kaiko, crypto trading has skyrocketed in Turkey The Turks turned to cryptocurrency because the Erdogan-led government has made it difficult to convert lira into gold or UD dollars. And they see many gains in cryptocurrency.
However, this has drawn the attention of Ankara and things are bound to get tougher. Earlier in the year, the autocrat had said Turkey would ban digital tokens from being used as payments – starting April 30. This led to the collapse of two exchange platforms, Vebitcoin and Thodex, in the country. Thodex had about 390,000 users. The government’s move caught the investors off guard.
Renato Fazzone, senior managing director at FTI Consulting, warned investors of Turkey’s policies. He believes consumers looking for ‘quick gains’ should leave cryptocurrencies aside. Fazzone argued that cryptocurrencies as assets are extremely volatile. It lacks regulation. The executive says platforms should shield and safeguard their customers against risks that come with investing in cryptocurrencies.
Meanwhile, the Turkish president has assured the people of Turkey that the government will make up losses to lira deposits. Erdogan said the government will step in if the lira’s value against hard currencies takes a deep plunge.