Amidst the U.S. imposing sanctions against Turkey, investors seem to be turning to Bitcoin as the lira currency takes a nose dive. As a result, the BTC/TRY trading pair has been going through the roof.
On Monday, 13 August the price of Bitcoin spiked against the Turkish lira (TRY). Actually, it was the highest its been in seven months. The lira dropped to its lowest ever of 7.20 TRY against the U.S. dollar. One Bitcoin now costs more than 47 000 TRY! This is the highest its been since January 2018.
U.S. imposes sanctions against Turkey
This all started with a pastor from North Carolina, Andrew Brunson. He was accused of espionage and is currently not allowed to leave Turkey. U.S. president Donald Trump imposed sanctions against Turkey and demanded that Brunson is released and send back home to the U.S. Trump tweeted that he authorized a doubling on Steel and Aluminum tariffs “with respect to Turkey”. He even said relations between the two countries are not good at the moment.
In return, Turkish president Erdogan called Trump’s sanctions an “attack” on the Turkish economy.
Meanwhile, Brunson has been removed from jail and is under house arrest in Turkey. However, the result for the Turkish currency has been devastating. The lira is down 80%!
Good news for BTC/TRY?
The case of Pastor Brunson is devastating. Whilst it doesn’t seem as if neither the U.S. or Turkish president wants to give in, investors appear to be rattled as the price of the lira continues to crash.
It is interesting to note that several Turkish cryptocurrency exchanges such as Koinim, Btcturk and Paribu have seen an enormous increase in trading volumes since the news broke on Friday. Paribu for example reported a 100% increase in BTC/TRY trading volumes! Does this mean that Turkish investors regard Bitcoin as a safe haven? It seems to be the case since inflation has increased and the TRY spending power has decreased. Bitcoin may be regarded as a good store of value.
Looking forward, the price of BTC/TRY may continue to rise as Turkey continues to experience interest rate hikes in an effort to stabilize the lira.
Since June, the BTC/TRY price has increased by 67%. Meanwhile, the BTC/USD price is currently at $6, 053.28, according to Coinmarketcap.