As Turkish Lira Collapses, Bitcoin Advocates See VindicationGuest Post
With Turkish Lira collapse making headlines around the world recently, and with countries such as Venezuela looking to cryptocurrencies as an alternative store of value, could bitcoin offer a solution to market volatility? Below is some commentary from bulls, although on the contra side Bitcoin has fallen even more than the Lira in 2018.
Nicolas Gilot, Co-CEO of blockchain-powered gaming distribution platform Ultra says:
“Cryptocurrencies have become increasingly popular in countries such as Venezuela, where the local economy is in turmoil and the currency is struggling. Bitcoin has now become a store of value, and many recognize it as digital gold instead of a payment system. As the lira’s crisis deepens, Turkey’s crumbling economy could also turn to bitcoin in its hour of need as it offers an alternative solution to hyperinflation and a collapsing currency.”
Gianluca Giancola, Co-founder and Head of UX & Design at blockchain-powered loyalty ecosystem qiibee, says:
“In recent years, we have witnessed a crisis of confidence unfold in Turkey as fears surrounding the financial and political situation rumble on. As a result, people have been looking for alternative mediums of exchange such as cryptocurrencies.
As the Turkish lira continues to fall and hit record lows, we can expect to see a mainstream movement towards people investing in digital assets. Venezuela is currently in a similar situation, where the hyperinflation of the bolivar has caused a significant surge in crypto volumes, and merchants are even accepting any of the top 14 cryptocurrencies as payment.
Trade wars and economic crises around the world have impacted the public’s confidence in fiat currency, which could lead to an increased interest in crypto. In Turkey, where trading in crypto is relatively easy compared to other jurisdictions, this seems to be a very likely scenario.”
Oded Noam, Orbs’ Chief Architect, commented:
“It is expected that when a currency is unstable, anyone who has savings will prefer to switch to safer assets. As we saw in the past few years with currencies in Nigeria and Venezuela, if Liras are riskier than other currencies, people will buy euros or dollars, and also bitcoin.
However, if the euros are kept in banks inside Turkey, the government can freeze or even forfeit these assets. Turks saw that happen in neighboring Cyprus just a few years ago. Bitcoin is seen as a safe haven from such action: Cryptocurrencies are managed by a computer protocol that cannot be manipulated, so no government has the authority to freeze accounts or forfeit anyone’s holdings.”
Eiland Glover, Founder and CEO of Kowala, commented:
“Interest rate manipulation by the central bank appears to be Turkey’s only option. But what about a future where in which governments lack much of the power to create such economic crises in the first place? We are witnessing the end to the nation-state’s monopoly on the creation of money. New decentralized—and stable—cryptocurrencies are on the horizon. These will soon enter the marketplace as viable alternatives to government fiat. Before blockchain, the idea of burning money was not possible for those in control of the money supply. Price stabilizing mechanisms such as autonomous money supply control are much simpler and more effective than the current tools at Central Banks’ disposal. As this happens, money will simply become another product, and consumers and businesses will be able to choose from among many viable currencies just as easily as choosing a brand of laundry detergent. When this happens, the market will be better at washing out individual failed firms instead of allowing the crises to build to the level of failed states and contagion.”