Friday, December 3

Bitcoin is the only salvation for currency crisis in Turkey


As the Turkish Lira (TRY) has been declining in value, not just in recent days but since its inception, Bitcoin may be the only salvation for Turks looking to save themselves economically.

With significant drops in any period analyzed, people only use the Turkish lira because they are obliged by the government. Otherwise, it would be useless even as toilet paper. The same phenomenon is noticed in any other fiat currency.

Even with the US dollar being the most used fiat currency in the world, as a store of value and for international negotiations, its unbridled printing makes it not such a good asset. This can be seen better when comparing USD to BTC.

Turkish Lira is falling… since forever

Although it has gone through reformulations since its creation, its purchasing power has been falling sharply since the 70s when the Gold Standard was universally abandoned.

The recent drop is associated with military events, such as the wars against Iraq and Syria, as well as the drop in tourism due to the Covid-19 pandemic in recent years. The good thing about Bitcoin is that it is apolitical and global.

Over the past three months, the Turkish lira has plummeted 31.37% against the US dollar. When we analyze a longer period, the situation is more critical, 85.62% since January 2013. The loss is even greater if we look at previous periods.

TRY/USD, daily, last three months. Source: TradingView

TRY/USD, monthly, last 8 years. Source: TradingView

While the US dollar (USD) looks like a good option when looking at these charts, it is worth remembering that the US dollar is experiencing its worst inflation period in decades. In other words, the only way out is Bitcoin.

Dollar looks like Turkish Lira when compared to Bitcoin

Although we are used to seeing the BTC/USD chart, it is important to look at the chart in reverse, ie USD/BTC. In this way we see that the US dollar looks like the Turkish lira when compared to bitcoin.

USD/BTC, last 5 years. Source: Google Finance

Over the past 5 years, the USD has lost 98.71% of its value against the BTC. This number is even higher, and difficult to calculate, when we take this quote from the first years of the BTC, when it was only worth a few cents.

Is Bitcoin expensive or are fiat currencies cheap? The high demand for BTC, anywhere in the world, is the natural reaction of people who are tired of seeing their money losing purchasing power. Because of this, some analysts claim that 1 Bitcoin could be worth 1 billion dollars in the future.





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