Turkey is the latest country to come under fire from a US trade war. Its fiat currency – the Turkish Lira – has fallen more than 40% against the USD so far this year, and its concerned residents are not hanging around to see if it slides even further. Similarly to what we have seen in Venezuela and Iran – two other nations crippled by US sanctions – its citizens are turning to cryptocurrencies as their saving grace.
Bitcoin has come to the rescue in Venezuela, and the government has even created its own oil pegged cryptocurrency – the Petro. Over in Iran however, citizens have not been so lucky. A number of Iranians had their crypto holdings frozen by order of the US government, leaving them without any money. For that reason, Turkish citizens need to be careful when choosing a crypto exchange, or remove all crypto assets and store them in a hardware wallet to ensure total security.
Bitcoin is the New Safe Haven
Traditionally, when forex markets begin to crash investors turn to the Japanese Yen. However, with the rise of Bitcoin and other cryptos, there has been a shift in the idea of what constitutes a safe haven. Bitcoin gives people the ability to buy goods and services online without the need for a bank account, meaning if Turkish banks crash, its citizens will still have access to their own money. They can then use this to buy goods and services within and from outside the country. This decentralized nature is one of the key reasons investors are moving away from the Yen and towards crypto markets. Iran had some savings in a German bank, but the US government told the bank to deny the withdrawal request, leaving Iran without access to its own funds.
Crypto Interest Rising
In the past couple of weeks, traffic coming from Turkey to bitcoin.org has risen by 42% in the wake of the crashing Lira. Twitter users @cobrabitcoin noted that this is exactly how cryptocurrencies will take over the world, and with more countries fiat currency falling apart, more people are turning to crypto for a way out of poverty. Could the US be looking to create failing fiat currencies around the globe so people are forced to move to cryptos? The DEA has said that they can trace any crypto transaction – even if it is made with the most secure and private cryptos – which could prove this theory somewhat correct.
There’s been a MASSIVE 42% increase in visitors to https://t.co/OsFgRFRRZb from Istanbul as the Turkish Lira plummets. This is how Bitcoin takes over the world, not through ETF’s and “HODL”, but through replacing fiat currencies as they fall apart!
— Cøbra (@CobraBitcoin) August 13, 2018
Recurring Economic Patterns
A pattern is beginning to emerge, and the public is beginning to notice it. The US imposes sanctions, a foreign economy starts sinking, and then the citizens turn to crypto. Venezuela appears to have been the guinea pig in all of this, with many realizing they can turn to crypto a little too late. Next came Iran, whose citizens ran to crypto at the first sign of trouble, but the US shut their accounts. Finally, there is Turkey who is copying the same moves made by Iran. If history does in fact repeat itself – which it so often does – Turkish crypto investors will need to ensure they keep their crypto assets in hardware wallets. This pattern of economies collapsing and citizens turning to crypto is happening too often for it to be a simple coincidence. If enough smaller economies collapse, they could join together and start using crypto, rendering trade wars a thing of the past.
Crypto certainly comes with a whole host of everyday uses, and with the help of sites like Bitcoin Supermarket you can now buy virtually anything with it. As time progresses and more countries begin regulating and accepting cryptos, there is a greater chance of mass adoption. This would mean that cryptos could eventually be in a position to replace fiat currencies – all it takes is for one to do so and others will surely follow suit.