Turkey’s national currency has tumbled 6.3% against the dollar since the start of 2017. The USD/TRY Forex pair hit an all-time high of 3.7442 today. The assassination of the Russian ambassador to Turkey in December in Ankara, along with the multiple bombings over the last several months, have lead to a rapidly deteriorating geopolitical and economic environment.
BMI Research released a report in December that showed Turkey’s rapidly deteriorating economic health. The report states:
“Our bearish outlook on Turkey's economy is playing out, as growth contracted for the first time since 2009 in Q316. Real GDP shrank by 1.8% year-on-year in the quarter, driven largely by falling investment and slowing private consumption. Growth in Turkey has proved remarkably resilient over previous quarters in the face of rising headwinds, however the most recent GDP data suggests that the economic situation is now deteriorating.”And it’s not just poor economic conditions & terrorism that are responsible for the crash of Turkey’s national currency. The Turkish lira was trading under 3.1 to the dollar for most of 2015 and 2016, but Trump’s election sent Turkey’s currency plunging close to 14% in the space of 23 days, between Nov. 9 and Dec. 2, 2016.
While Turkish President Recep Tayyip Erdogan has asked patriotic Turks multiple times to convert their foreign assets into lira to halt the plunge of the Turkish currency, there is now evidence that some Turkish citizens have started looking into digital currencies to escape the plunge of the lira.
Just like in Malaysia, where Bitcoin trading volumes began to surge in the weeks following Trump’s election as the Malaysian ringgit began to crash against the dollar, some nervous investors in Turkey have also turned to Bitcoin to preserve purchasing power as the lira’s fall accelerated in the last two months of 2016.
Charts from Coin.dance, which tracks turnover figures in various countries on LocalBitcoins - a popular P2P Bitcoin trading marketplace - show the first big spike in Turkey taking place in the week following Trump’s election: TRY349,346 worth of trading took place for the week ending on 2016-11-19.
The first week of 2017 show a new record of TRY366,285 worth of Bitcoin trading on LocalBitcoins in Turkey!