The million trades per day milestone was recorded by blockchain analysis firms Chainalysis and Kaiko. Rampant inflation and a currency devaluing by nearly 40% since September have resulted in citizens flocking to crypto assets to preserve their dwindling savings.
According to Reuters, the surge in trading began earlier in the year when the central bank chief was replaced, triggering the first Lira slump.
Turks Turn to Crypto
Turks have been increasingly converting Lira into USD or gold as the currency has lost 90% of its value since 2008. Decentralized crypto-asset have now become another option to protect people against economic turmoil. Bitcoin and Tether have been the most popular trades against the Lira for the past three years.
At the time of writing, $1 was worth 12.37 Lira, at the beginning of the year, it was worth 7.37 Lira. The currency crashed to 18 Lira to the dollar on Dec. 20.
According to CoinMarketCap, more than 16% of the world’s crypto users came from Turkey, which occupied the fourth position for the most number of users.
Crypto in Turkey Is It A Nightmare
— CoinMarketCap (@CoinMarketCap) December 21, 2021
However, a number of Turkish crypto traders replied that the video was misleading as crypto trading is not banned in the country, exchanges are still in operation, and it is easy to cash out.
Reuters reported that the central bank banned crypto for payments back in April. In September, Turkey’s deputy finance minister said that regulations on the asset class would be introduced.
Doubtful Rescue Package
On Dec. 21, the Wall Street Journal reported that President Recep Tayyip Erdogan announced a rescue plan to encourage Turks to put their money back into the failing currency. This has resulted in a slight strengthening of the Lira, but it has still lost half of its value against the greenback since the beginning of the year.
The government stated that it would guarantee returns on Lira deposits at similar rates to those on foreign currencies. Turks would need to deposit Lira in fixed accounts with a minimum interest rate, but the state would make up any differences it lost against the dollar.
The government did not specify how it would pay for the incentive, and economists suggested that the central bank would continue printing money.
Total crypto market capitalization has gained 4.7% over the past 24 hours, reaching $2.4 trillion, and it is likely that Turkish trading may have had some influence on the uptick.