Despite the fact that some currencies have been greatly strengthened during the Coronavirus crisis, this is not the reality for all Fiat money worldwide. In fact, and as several crypto analysts have commented over the years, it has been in countries outside the western world where Fiat money has started to fail. Therefore, the news that the Turkish Lira falls against Bitcoin, would not be news to the crypto community.
Turkish fight for its economy
The Turkish economy is in serious trouble, and has been for several years now. Since its economy, based essentially on the construction sector, has faced the effects generated by overheating due to excessive public spending. Added to Turkey’s political problems with Western countries, it has led to its estrangement from its NATO allies.
All this without counting his involvement in the wars in Libya and Syria, where he has repeatedly clashed with the Russian military forces. Making this situation the perfect mix to generate a strong economic recession in the country. Clearly reflected in the weakening of Turkey’s currency: the Turkish Lira.
Thus, in the last year, the Turkish Lira has reached ever lower levels, weakening not only against Western currencies. It has also fallen against cryptocurrencies such as Bitcoin, which has continued to appreciate against the Turkish Lira.
The historical maximum of 82,391 lire per BTC can be highlighted, before going back to the 77,398 lira it is currently trading on.
The rise of Bitcoin against the Turkish lira
This occurs despite the enormous efforts put in by the Turkish government. Which has injected billions of dollars of its international reserves into the money market, with the aim of trying to maintain the value of the Turkish Lira against the total collapse of the national economy. Recalling the path followed by governments such as Russia and Argentina, who tried unsuccessfully to inject money to keep their currencies afloat.
This is why economics professor at John Hopkins University, Steve Hanke, commented through his account on Twitter than “the Turkish lira is burned. The central bank’s net external assets are a staggering $ 32 billion negative. Turkey has run out of ammunition in its futile defense of the desperate lira. Only a gold-backed monetary authority can save the lira“
This steep drop in the value of the Turkish Lira also comes at a time of real boom for Bitcoin. When, after several weeks of stagnation in its price, it is experiencing a new bullish rally that has already allowed the cryptocurrency to overcome the barrier of $ 10,000. Something that according to Max Keizer will eventually lead to the consolidation of the so-called “Bitcoin standard”
In any case, what is clear with this is that, although some Fiat currencies have managed to remain stable during the world crisis. Many national currencies like the Turkish Lira have not had this advantage, and it is right in countries like Turkey where Bitcoin can be an alternative for saving its citizens.