Turkish Lira is more volatile than Bitcoin on 90 days, and its volatility has increased to 65% per annum compared to Bitcoin.
According to TradingView data, the Turkish Lira’s 90-day volatility, or how much the price deviates from its average against the US dollar, has increased to 65 percent annualized, a five-fold rise in two months, while Bitcoin’s historical volatility has dropped to 61 percent.
The increased volatility implies that prices are rising more than expected. The Turkish Lira is a government-controlled Fiat currency, so it suggests to be a stable asset. Still, it is more volatile than Bitcoin, which is decentralized.
Bitcoin is often criticized for its volatility or for not having a “ballast,” however, it is possible to consider that Bitcoin’s ballast resides in the decentralized and verifiable network security.
Meanwhile, Fiat currencies often follow dollar ballast, based solely on trust in politicians and their economic measures, which are harmful and only worsen its economy through printing and inflation.
The Lira fell about 9 per dollar to 18.50. It then followed to a level of 10 Turkish lire per dollar and is currently trading at 13.83. Turkish President Recep Tayyip Erdogan followed a strategy of cutting interest rates in times of rising inflation and dismissed central bankers who opposed the cuts.
The sacking of deputy governors Semih Tumen and Ugur Namik Kucuk and Monetary Policy Committee member Abdullah Yavas came from a meeting between Turkish President Recep Tayyip Erdogan and the bank’s chairman, Sahap Kavcioglu.
Turkish President Recep Tayyip Erdogan’s administration has disputed a media allegation that the president has lost confidence in Kavcioglu.
The Turkish presidency uploaded an official image of the two men together on Twitter following their meeting on Wednesday, and the president’s office hailed their chat as “good.”
In November, the Lira weakened when Turkey cut borrowing costs for the third consecutive month, even as inflation soared.
When fighting high inflation, countries typically use rate increases and other tools to suck liquidity out of the market.
Rate increases increase the domestic currency’s yield and usually lead to an appreciation of the exchange rate. As the currency strengthens, the cost of imported goods decreases.
The Turkish Lira is volatile when compared to Bitcoin
The Lira’s historical 90-day volatility is now significantly higher than significant Fiat currencies such as the euro, pound, and yen. Still, it remains less volatile than meme cryptocurrencies such as Dogecoin and Shiba Inu.
On the other hand, Bitcoin has a scheduled currency issuance policy, whose limit is up to 21 million units, with a 50% decrease in issuance every four years, an event called halving.
Consequently, Bitcoin prices fluctuate, sometimes due to official actions such as those done by the Kazakhstan Government, which cut off Internet access to the whole country, resulting in protests and the shutting down of Bitcoin nodes across the country.
Although it is hard to put a specific number on the drop in Bitcoin hash rate, it is worth mentioning that Kazakhstan hosted the most significant number of miners following the mining ban in China.
It might be attributable to the fact that the two nations are neighbors, which might explain the large number of miners working in Kazakhstan.
The United States and Russia were also among the nations that welcomed new entrepreneurs from China, in addition to China.
According to the International Labor Organization, the influx of cryptocurrency miners into Kazakhstan was so great that the country’s generating and distribution networks were overwhelmed again, resulting in blackouts in October of last year.
Because of its decentralization, the Bitcoin network generates new blocks and confirms transactions like it did previously.
According to a process built into Bitcoin’s code, the difficulty of mining is also recalculated every 14 days.
All of this interferes with the activities of miners and the Fed, resulting in a sudden reduction in hashrate and decline in Bitcoin price, causing the entire market to fall.
However, Bitcoin remains an asset that is resilient to external pressures, where it recovers quickly and is not directly interfered with by any government.