Turkey

In 2021 and 2022, Turkey experienced one of the most dramatic currency crises of any major economy in recent history. The Turkish lira lost approximately 44% of its value against the dollar in 2021 alone. By late 2022, annual inflation had reached 85%.

The cause was a combination of unconventional monetary policy — President Erdogan repeatedly pressured the central bank to cut interest rates despite soaring inflation, contrary to standard economic practice — and broader macroeconomic pressures.

For ordinary Turks, the effect was devastating and immediate. Savings held in lira were losing value faster than wages could compensate. A family that had saved carefully for years found their purchasing power halving, then halving again.

Bitcoin adoption in Turkey surged. Trading volumes on Turkish exchanges spiked. Bitcoin ATMs appeared in Istanbul neighbourhoods. Young Turks who couldn’t access dollar accounts through traditional banking used peer-to-peer platforms to convert lira to Bitcoin as quickly as they received it.

Turkey’s government response was to attempt to restrict crypto — proposing regulations, debating bans, attempting to channel adoption into regulated products. The peer-to-peer activity continued regardless.

What happened in Turkey is a pattern that repeats across countries experiencing currency crises: when the official monetary system fails its primary function — storing value — people seek alternatives. Bitcoin, available globally with no account required, is increasingly the alternative they find.

Tomorrow: Iran — Bitcoin mining as a way around sanctions.

— The Daily Bit