Trading volumes on Turkish cryptocurrency exchanges have increased by 37% since October 2018. This indicates that the popularity of Bitcoin has not suffered from the recent decline in annual inflation in the country.
The Financial Times reported that during events that surprised both economists and analysts, inflation in Turkey in November 2018 fell after it reached a peak of more than 25% in previous months.
After the United States announced retaliatory tariffs on imports of steel and aluminum from Turkey, the lira lost more than one-fifth only on August 10. And although the national currency managed to recover part of its value, inflation, which reached a 15-year high in September 2018, remains a serious problem for the country.
Analysts at Goldman Sachs forecast that the annual rate of consumer price inflation will reach a maximum of 27% in the first quarter of 2019, and then by the end of the year it will drop to 15%, reports the Financial Times.
Vedat Akgiray, a professor at the Department of Finance at the Bosphorus University in Istanbul, told Slate that confidence in financial institutions in Turkey is at an all-time low, prompting citizens to look for an alternative - decentralized currency. The financial crisis that hit Turkey throughout the summer led to a significant depreciation of savings, pensions and investments, as the national currency reached a historic low of about 7.2 lira per dollar.
However, financial instability and uncertainty did not frighten the young and technically savvy population of the country, which led to an unprecedented increase in the popularity of cryptocurrencies, especially Bitcoin. According to Slate, the ING / Ipsos study, conducted from March 26, 2018 to April 6, 2018, showed that 18% of the surveyed Turkish citizens own cryptocurrency, while only 9% of Europeans have any accumulations in digital assets.
A survey conducted by Twentify, a Turkish research firm, in August 2018, showed that 20% of respondents bought and sold Bitcoin. What made the growth of Bitcoin's popularity even more remarkable is the fact that in the same month its price fell by 10%.
This phenomenon has even been noted by some of the largest names in the cryptocurrency industry. On August 13, 2018, an anonymous co-owner of Bitcoin.org tweeted a significant increase in the number of visitors to the site from Turkey, saying that Bitcoin would take over the whole world, replacing dying fiat currencies.
The head of the IC3 research group at Cornell University, Emin Gün Sirer (Emin Gün Sirer), told Slate that digital currencies are very attractive to young people in Turkey. The relatively young population of the country compared with the European one, the flexible introduction of new technologies and the cultural propensity for financial schemes with high profits make it fertile ground for Bitcoin.
Recently it was reported that P2P markets in Latin America continue to show record volumes of cryptocurrency trading. Citizens of these countries are trying to escape from the economic crisis and the depreciation of fiat currency with the help of Bitcoin.