Turkey's lira plummets, local Bitcoin soars to $100,000

The Turkish lira plunged 17% against the dollar in a day as President Erdoğan fired reformist central bank governor Naci Ağbal late Friday night, replacing him with ally Şahap Kavcıoğlu.

Turkey's currency, historically plagued by high inflation, also fell 23% against the dollar last year and had been in free fall until the previous governor appointed in November raised interest rates to curb inflation despite Erdogan's opposition to high interest rates, which was the reason for his ouster, according to analysts interviewed.

Google Trends data shows that the number of searches for "Bitcoin" in Turkey last night reached the "popularity peak" (relative score of "100") in the past 7 days, coinciding with the opening of Asian markets amid a new round of lira volatility, which also set off an uproar on Turkish social media. Data provided by Google Trends shows that Turkey's searches for Bitcoin have surged by 566%.

But further analysis of Google Trends data shows a surge in interest in Bitcoin, particularly in some of the country’s poorest provinces, with the top three being Diyarbakir, Batman and Hakkari.

A country with a population of 82 million saw its currency plummet 15% in a single day.

Coincidentally, Türkiye is the country with the highest per capita use of Bitcoin in the world.

More and more Turks are making a smooth transition to a different monetary system that their oppressors cannot control.

— Alex Gladstein (@gladstein)

A source in Turkey’s cryptocurrency industry revealed that their company had recorded particularly high trading volumes today due to a recent update to Turkey’s lira protection law that imposes penalties on actions that could be interpreted as defaming the country’s currency, and he speculated that concerns about capital controls may ultimately prompt ordinary citizens to seek alternatives that do not involve regular bank accounts.

For many people, especially young people, crypto investing is increasingly seen as a digital version of the traditional domestic hoarding of physical gold.

The ups and downs experienced by fiat currencies have driven more people to favor Bitcoin. This momentum is evident in the peer-to-peer (P2P) market, where the value of Bitcoin in Turkey has soared to $100,000. Data shows that the lowest asking price for Bitcoin has reached 510,000 Turkish liras (about $64,000). Some offline exchanges have set the price of a single Bitcoin at $100,000 liras.

Currently, Bitcoin is valued at about $55,000 in global markets, however, exchanges in Turkey are offering nearly double that. As Turkey's economy takes another huge hit, the surge in interest in cryptocurrencies among citizens and the government could help stabilize the aftermath.

The Turkish government has been working to create regulations for crypto, and recently made it clear that it is working with the central bank on digital assets in the country. Now that more people are turning to Bitcoin and witnessing a rebound in Bitcoin, the government may want to step up its efforts to form these guidelines.