Turks are turning to cryptocurrencies to stave off volatility in the lira.
Daily cryptocurrency trading has surged above 1 million per day, according to a Reuters report.
The Turkish lira has slumped 40% against the US dollar amid interest rate cuts and high inflation.
As the Turkish lira plummets, cryptocurrency trading is surging.
The tally of Turkey's crypto trades has soared above a million per day, a level not reached since the lira's first big drop this year in March, when the head of the country's central bank was suddenly replaced, according to a Reuters report.
After that initial spike, crypto trading eventually fell below 500,000 trades per day. Then Turkish lira volatility struck again recently, and daily crypto trading surged back to a million, the report said, citing data from Chainalysis and Kaiko. Data also show bitcoin and tether have been have been the top crypto trades in Turkey since 2019.
Turkey's central bank announced another interest rate cut last week — following a series of previous cuts — that caused the value of the lira to plummet against the US dollar, CNBC reported. President Recep Tayyip Erdogan, who has called high interest rates "evil," has pressured the central bank to buck conventional economic wisdom on inflation, which is 21% in Turkey, CNBC said.
So far this year, the value of the lira has slumped 40% against the greenback, exacerbating the country's inflation. That has pushed Turks to the volatile yet rising market of cryptocurrencies. Reuters said Turks have often turned to gold or US dollars for refuge from the lira, but the gains in cryptocurrencies have now caught their attention.
Bitcoin has risen 65% year-to-date, and the crypto market as a whole has surpassed the $1 trillion valuation mark.
Even with the bull run, the market is still rife with volatility. Bitcoin, for example, hit a record high of $69,000 last month and is now teetering below $50,000.
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