‘We Couldn’t Get Any Foreign Currency’ – Turkey’s Capital Controls Show Why Bitcoin Exists
Turkey introducing capital controls to stem the impact of its currency crisis means traders can “expect” higher Bitcoin prices on local exchanges, a well-known online commentator has suggested.
‘Expect Price Premium’
Tweeting August 13, BambouClub eyed spreads on P2P platform Localbitcoins, forecasting buy and sell asks to increasingly diverge as the country’s economic situation worsens.
“With capital controls being introduced in Turkey expect a black market for hard currency to develop which will be reflected in a premium in Bitcoin prices in Turkey,” he commented.
Turkey has “de facto” introduced capital controls on foreign currency purchases, local businesses, and wider media sources are reporting Monday after president Tayyip Erdogan called on residents to convert their forex holdings into lira.
“We couldn’t get any foreign currency out yesterday: we wanted to take out $50,000 but they directly said ’no,’” one consumer told Bloomberg. “We couldn’t carry out an [electronic funds transfer] either.”
With capital controls being introduced in Turkey expect a black market for hard currency to develop which will be reflected in a premium in Bitcoin prices in Turkey. $TRYhttps://t.co/VbHpCkqU7W pic.twitter.com/CEmCYODKyB
— BambouClub [BitMEX] (@BambouClub) August 13, 2018
Exchange Volumes Surge
Attention is now focusing on the impact of the lira collapse on foreign markets, with both developing economy currencies and neighbors such as the eurozone coming in for increasing exposure.
At press time, Localbitcoins listings had not significantly diverged from implied lira prices per bitcoin based on USD rates.
Nonetheless, data from Coinmarketcap which has since made mainstream press headlines shows local exchange platforms have seen volumes expand rapidly. Koinim, for example, saw a 155 percent increase over the past seven days.
Consumer interest comes despite the official shunning of cryptocurrencies at the state level, with government sources last year claiming they did not fit in with Islam.
Despite the moral status quo, banks still service local exchange operators.
What do you think about Bitcoin popularity in Turkey? Let us know in the comments below!
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