The inflation rates in Turkey have reached a 24-year high, with the current inflation rate at 78.62%. The figure that was published by the Turkish Statistical Institute, showed a monthly increase of 4.95%.
As the European Central Bank raised interest rates for the first time in 11 years various countries are also facing similar inflation rate hikes. This is one of the many reasons why the inflation rate is so huge, which includes rising energy costs and the Turkish lira getting weaker with time.
As the lira weakens, LocalBitcoin’s BTC volume in the region has increased significantly. Furthermore during the first and the second quarter of 2022 a huge increase in the peer-to-peer Bitcoin trading volumes has been observed while comparing to the Q4 of 2021.
LocalBitcoins trading volume increased by 51% in the first quarter of 2022 when compared to the fourth quarter of 2021 and by 40% in the second quarter of 2022. This significant increase clearly indicates that people are turning to cryptocurrency to protect their finances.
Amid these economic developments, the Turkish government is taking several measures. However, all sorts of people are turning towards cryptocurrencies and neither age nor gender influences the decision to invest in crypto during such times.
Turkish President Recep Tayyip Erdoğan has been reluctant about the recent rise in the interest rates and called interest rates the mother of all evils. This led to the devaluation of the Turkish lira and the country had to take drastic measures to solve this problem.
The government has introduced a scheme to bring gold savings into the banking system as a measure to combat inflation. The government claimed that the Gold Conversion Deposit Account offers risk-free returns. The gold in the houses is estimated to be around $250 to $350 billion.
Turkey has already imposed a ban on crypto payments back in 2021, but that doesn’t seem to be stopping citizens from simply investing in crypto as an asset class. Furthermore, if the fight continues, crypto investments are only likely to increase. People often consider cryptocurrencies as a hedge against inflation, but that argument seems to be losing steam as it continues.
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