Opportunities for crypto like Bitcoin in Turkey as annual inflation tops 36%

Cryptocurrencies are set to gain wider adoption in Turkey after the annual inflation crosses the 36% mark, the highest since 2002.
According to the Turkish Statistical Institute, annual inflation in Turkey has crossed the 36% mark. Pic Credit: ccarlstead via Flickr

Key Takeaways

  • Annual inflation in Turkey has crossed the 36% mark, according to the Turkish Statistical Institute
  • The trade volume in cryptocurrencies continues to rise in Turkey as cirtizens hope to preserve their savings

YEREVAN (CoinChapter.com) – The Turkish economy continues to be in shambles, paving the way for crypto like Bitcoin. According to the Turkish Statistical Institute, the country’s inflation has surged 36% amid the Lira crisis. 

As per the data which the official agency tasked with producing statistical reports released, the Consumer Price Index (CPI) increased by 13.58% monthly and 36.08% annually in December 2021. This amounts to the highest inflation rate the country has seen since September 2002.

Cryptocurrencies are set to gain wider adoption in Turkey after the consumer price index (CPI) increased by 36.08% annually and 13.58% monthly
The consumer price index (CPI) increased by 36.08% annually and 13.58% monthly. Credit: Turkish Statistical Institute

Part of the cause of the country’s economic slump has been Turkish President Recep Tayyip Erdoğan’s insistence on lowering interest rates.

Due to the plummeting lira, Turkey’s central bank has slashed its benchmark interest rate by over 15%. Lowering the interest rate at the time of massive inflation is contrary to basic economic practices. At the same time, Erdoğan has remained a staunch critic of crypto.

The Turkish President has reportedly resorted to quoting the Islamic scriptures claim that high-interest rates are evil and un-Islamic. 

According to the CPI report, transportation has experienced the most price hike at 53.66%. Food and non-alcoholic beverages and furnishings, and household equipment come next. Each group registered a 43.80% and 40.95% increment, respectively. The lowest annual increase registered was in communication, with 8.76%. 

Cryptocurrencies are set to gain wider adoption in Turkey after the consumer price index (CPI) increased by 36.08% annually and 13.58% monthly
CPI annual rate of changes in main groups December 2021. Credit: Turkish Statistical Institute
Recommended: Crypto trade surpasses one million daily in Turkey as Lira woes persist

Crypto provides hope for Turkish citizens

According to CoinMarketCap, more than 16% of the world’s crypto users came from Turkey.

Ever since Turkey’s economic crisis broke out, citizens have been turning to cryptocurrencies. to shelter their savings from inflation. 

According to a report published by Reuters last March, crypto trading volumes between the start of February and March reached 218 billion lira ($26 billion). 

Data from the cryptocurrencies analytical website Chainanalysis suggests Turkey had by far the highest transaction volume in the Middle East last summer at $132.4 billion.

Turkey has the highest transaction in cryptocurrencies in the Middle East.
Turkey has the highest cryptocurrency transaction volume in the Middle East. Credit: Chainanalysis

As a result of the crisis brought about by President Erdoğan, the number of cryptocurrency trades in Turkey crossed one million per day again in December.

According to market analytical platform Kaiko, the slump in the lira resulted in an unparalleled increase in crypto-lira trade in the country as the year came to a close last month.

“Weekly cryptocurrency trade volumes in Turkey have grown significantly since 2020 from a few million to over 4bn lira,” 

the report reads.
Cryptocurrencies are poised for wider adoption in Turkey. Bitcoin currently trades at TRY 615, 360 per BTC.
Bitcoin currently trades at TRY 615,177 per BTC. Credit: Trading Economics

However, while the official statistical body places the annual inflation rate at 36%, some claim that number is much higher. 

The Inflation Research Group (ENAG) announced that the annual consumer inflation rate was 82.81%. However, the monthly inflation rate, according to ENAG, was 19.35% last month, unlike the 13.58% claimed by the Turkish Statistical Institute. 

However, despite the boom in the crypto trade, the fate of cryptocurrencies remains unclear. The country’s central bank banned crypto payments back in April to fight the exodus of capital from the country. The apex bank had hopped to prevent possible “irreparable” damage and transaction risks caused by cryptocurrency trade.

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