Turkish bitcoiners are becoming millionaires as the cryptocurrency nears one million Turkish Lira (TRY) for the first time ever.
Bitcoin has seen a 22,500% increase over their own money in the past five years, with no dip in Turkey as the crypto just crossed all time high in TRY.
Globally, it is a bit below all time high, trading at $47,000, but not in Turkey where a $1,000 premium has developed with the crypto there at the equivalent of $48,000.
It isn’t too clear why there is a premium considering Turkey’s markets are very open. To arbitrage, you’d have to send bitcoin, sell it for TRY and then sell try for dollars, buy btc with usd and repeat.
The problem is presumably the period during holding try and converting it to usd, a period during which the value of try might fall, cancelling any arbitrage opportunity.
Something that suggests arb bots have better opportunities and thus in turn suggests that demand for bitcoin in Turkey is higher than globally.
Bitcoin can act as a hedge at a time when the dollar has gained 3x over TRY since 2019 when it was 5 lira per dollar. Now it’s above 16 lira with it losing 50% since July.
This is attributed to the central bank cutting interest rates when inflation is rising above 20%. There is no indication this will change as Turkey’s president Recep Erdoğan goes head to head with financial markets.
The Highest Stakes of a Bold Gamble
Erdogan dithered in 2019 when a seething Bloomberg contributed to him changing course, installing a central banker approved by global markets, and with him the staircase of up and up interest rates.
Inflation didn’t quite care however, with it even higher in 2019, so he changed course again but that dithering has probably emboldened speculators as they press the accelerator in effectively a speculative attack on the currency.
Now the choice is stark between keeping on or giving up forever with those financial markets presumably also betting that since he backed down once, he’ll back down again.
Temptation must be high to do just that, but the Turkish economy is bigger this year than last year, even in dollar terms.
Exports are booming, with Turkey’s GDP growing higher than even China. Erdogan met Elon Musk this week as Turkey sends satellites to space. Turkish media speaks of new factories, new economic alliances, a new optimism in effect in contrast to our negativity obsessed western media. While Erdogan himself speaks of an “economic war of independence.”
In a very subtle nod of sorts, the Economist reminds us of a rail connected Middle East at the time of our grandfathers, barely a century ago when Basra, or Damascus, Gaza or Beirut were more ‘bohemia’ and a buzzing cosmopolis that had all religions and all peoples in peace and prosperity.
As the United States officially ends its engagements in Iraq, some are probably wondering whether the orient will rise again and even whether it is rising.
With peace once more, you’d think some of the best men in that region will construct some great plan to re-build this crossroad once more so that those trains once again connect London to Baghdad.
Europe in particular you’d think would find such matter of vital importance as peace and prosperity in its neighborhood can only mean prosperity, and peace too, in the continent.
America will not like it however as it loses dominion and Turkey’s recent troubles did start when America did sanction them, but a question to be revealed by time is whether such dislike of regional autonomy is from an America that has gone or an America that looks to the future.
Because in a region between China, Russia and Europe, it isn’t clear a carved orient would be better than a sovereign one, and if history has much say, it is likely it wouldn’t.
It is instead perhaps time for an orient golden age of the intellect, when a people far more similar to each other, put aside artificial differences that have now run their course, and put their focus on the good things of life and god: prosperity first and foremost.
With that change of focus, and considering just how much money some of them have, and just how many are foreign educated, and from how low a point some aspects start where they don’t even have trains, it isn’t too hard to see a potential boom like no other.
These moves on foreign exchange therefore are more the tantrums of the past perhaps, and maybe a bet that Europe, and Germany in particular, will repeat the mistakes of the past to the devastation of both continents.
Because looking to the future, the temporary concert might be irrelevant to the big play as a region rises and in many ways, at least to the pen’s hopes, the devils are banished and leave only angels to the game.
In the present, minute acts have big consequences for the players. In time, it is probable that certain forces of prosperity-first are unleashed which makes a lot of what is to come, a rising orient in particular, a very logical outcome of so many causes and effects.
That is to say, it is probable Turkey won’t be burned either way. More a matter of degree, and in that one, it is far too complex for us as there is too little data at this stage to say whether holistically, he should keep on or back down.
It is easier instead to say that regardless, this turbulence is a sign of a changing trend in a region long forgot as they are no longer destroying their railways because they have nothing left to destroy.
Fresh out of hell thus, it can only presumably be up.