The price of Bitcoin (BTC) has set a new all-time high (ATH) in Turkey, hitting 1,076,038.99 Turkish lira (TRY), as the country’s inflation lingers in discouraging territories.
The wild ride of Bitcoin to ATH in the region started as early as March 2020 when the COVID-19 pandemic-induced lockdowns began. Bitcoin’s growth is a testament to its embrace in the country as an alternative to the local currency.
Bitcoin Embrace Amid Falling Lira
Turkey ranks as one of the major crypto hotspots. The obvious reason Bitcoin forms a crucial part of the Turkish financial landscape stems from the consistently devaluing Lira. The embrace of Bitcoin by many Turkish residents comes as a necessary “flight to quality” push, a phrase attributed to BlackRock CEO, Larry Fink.
Though met with several sharp corrections, Bitcoin’s ascent in Turkey started in 2020 when the coin first reached a peak price of 479,551.90 TRY on April 30, 2021. The price of Bitcoin dropped back to 269,146 TRY by mid-July 2021, a sign that the Turkish Lira gained in relation to Bitcoin.
A series of highs and lows have emerged in subsequent months but things degenerated in February to March 2022 when the war between Russia and Ukraine broke out. The most significant move toward the current ATH started when Bitcoin traded at a low of 315,013.22 on December 2, 2022, and rode the tide until it broke its record as seen today.
At the current All-Time High, the BTC/TRY pair has grown by a cumulative 116,185.22%.
BTC as an Inflation Hedge
One good reason why the Turkish Lira is on a massive devaluation spree is because of the rising inflation in Turkey. Current data pegs this inflation rate at 61.36%, a figure that compares to the 3.2% recently recorded in the United States.
With this outlook, most Turkish residents have turned to alternative currencies to safeguard their wealth and Bitcoin came as the asset of choice for many.
Though designed by Satoshi Nakamoto as a currency to move value, its use case has expanded over the years and the cryptocurrency now occupies most firm’s portfolios as a hedge against inflation.
Besides Turkish residents, MicroStrategy, a business intelligence firm, helps prove this “Bitcoin as a hedge against inflation” thesis through its consistent BTC accumulations.