The Google searches for bitcoin skyrocketed to new highs in Turkey earlier today. The sudden increase comes amid a 15% daily price drop for the Turkish lira following the decision of President Tayyip Erdogan to remove the governor of the country’s central bank.
Turkish Lira Plummets by 15% in a Day
Turkish President Recep Tayyip Erdogan shocked the country during the weekend by firing without any explanation the nation’s central bank governor – Naci Agbal. Although Erdogan failed to provide a reason, the general assumption is that the termination is a direct consequence of Agbal’s policy to keep the interest rates high.
The President has repeatedly outlined that he believes this measure leads to higher inflation. Interestingly, though, a Bloomberg image indicated that the Turkish lira gained a lot of ground during Agbal’s short term against the dollar.
Shortly after removing Agbal, Erdogan replaced him with Sahap Kavioglu – banking professor and columnist in a pro-government newspaper.
Kavioglu, the fourth bank head appointed since July 2019, shares Erdogan’s belief that high interest rates lead to high inflation.
However, the Turkish markets and local currency didn’t react well to the weekend developments. The lira plummeted by 15% in a matter of minutes today against the dollar.
The pressure reached the nation’s stock market as the benchmark Borsa Istanbul 100 index sank by nearly 10%. The local and foreign currency bonds also plummeted.
Turkish People Turn to Bitcoin?
As the country’s economy suffered a major blow, some citizens seem to have looked for a somewhat untraditional solution. While Turkey maintains a somewhat controversial policy towards gold – an asset regarded as a safe haven, locals have enhanced their appetite towards the so-called digital gold.
Google trends data shows that the searches for bitcoin skyrocketed to new highs earlier today. Additionally, the growing interest led to numerous people employing the services of peer-to-peer exchanges, such as LocalBitcoins.
The rapidly expanding demand and the deteriorating value of the Turkish lira led to some exceptionally high requests. Data from the trading venue indicated that the minimum Ask price had increased to 510,000 TRY ($64,000), while, in some cases, the exchanges had demanded over 750,000 TRY (nearly $100,000).
It’s worth noting that bitcoin reached a new all-time high against the lira even before doing so against the dollar last year. As Turkey’s currency was fading in value, the price of one BTC topped 100,000 TRY in October 2020, while the previous record was at 70,000 TRY in late 2017.