The Turkish Lira is down by whopping 46% against Dollar since 2018 YTD. And the downfall is surely not over. The reasoning behind such movement is the dispute between US & Turkey over steel and aluminum tariffs and escalated concerns about the Turkish economy in whole. As the chart below illustrates, the exchange rate for the Lira to USD has been steadily declining over the past few years, but severely dropped off over recent news.
Consequently, Turkish Crypto exchanges are experiencing increased demand for cryptocurrency services. It is not just the Turkey which seeing this trend. Similar phenomenons have been experienced with the Bolivar in Venezuela and Rial in Iran.
ING International Survey Mobile Banking − Cryptocurrency June 2018 Report
Below are some of the interesting Images from the June 2018 report done by ING International
Drop Leads to Increased Demand for Cryptocurrencies
Turkey’s largest exchange — Koinim has reported a 63% increase in Bitcoin trading volume, while BTCTurk said that their volumes are up 35% and and Paribu said volumes are up 100%, according to a report by CoinMarketCap.
One thing which remains interesting is, Political leadership in Turkey understood the importance of Cryptocurrencies. They came up with report in Feb 2018 about launching the national cryptocurrency dubbed “Turkcoin“.
The proposed token will be backed by high quality assets. As per this Al-Monitor report,
In the MHP’s proposal, large public assets in the Wealth Fund such as Turkish Airlines, the Istanbul Stock Exchange, the gas company Botas, Turk Telekom, Ziraat Bank and the National Lottery would serve, in a sense, as its “insurance policy.”
One thing which remains clear is – The general population and even the political leadership of Turkey acknowledge the positives of adopting blockchain based currencies.
If even the World Bank has acknowledged it, how come JPMorgan Chase CEO calling cryptocurrency a scam?
Food for thought
One more (and the biggest) country on Trump’s Trade War list is “China”. China’s Yuan is down by almost 9% from high point in 2018 YTD. Economic growth conditions have continued deteriorating.
What may happen if China’s Yuan falls like Turkey’s Lira? and will adoption of cryptocurrencies would be the solution for currencies mess?
Feel free to comment on this question and your thoughts on the overall correlations between Cryptocurrencies and State-Backed Currencies.