Turkish Lira vs Bitcoin:
The Turkish lira is now more volatile than the bitcoin. The lira fell in the fourth quarter of 2021 as Turkey cut interest rates amid rising inflation. TradingView data shows the currency’s 90-day historical volatility. It is a measure of how volatile the price is from its average against the US dollar, which has risen to 65% annually. This is a fivefold increase in two months. The historical volatility of bitcoin has fallen to 61%. Let’s talk a little bit in this article from MarketsBloom about the Turkish lira vs Bitcoin. What happens when the value falls and what impact the market.
Turkish Lira vs Bitcoin
Rising historical volatility indicates that prices move more than usual. Assets with high volatility readings are considered risky investments. This means that the lira, a sovereign currency, is now more dangerous than the bitcoin. It is a cryptocurrency. created and distributed on a peer-to-peer basis and is often criticized for being unreliable as a means of exchange and a valuable store due to its turbulent price rise.
The lira collapsed from about 9 lire per dollar to 18.5 in the six weeks ending in mid-December before rising to 10. At the time of publication, it traded at 13.83. Turkish President. Recep Tayyip Erdogan pursued a strategy to cut interest rates in times of high inflation, contrary to economic doctrine, and replaced central bankers who opposed the cuts.
David Bell, a founder of Macrodesiac.com and director of UK growth at TradingView, told CoinDesk in a WhatsApp chat: “Falling interest rates amid rising inflation will lead to people selling currency – a recipe for disaster according to traditional theory.”
What happened during inflation
In November, the lira weakened when Turkey cut borrowing costs for the third consecutive month even as inflation rose. When fighting high inflation, countries usually use price increases and other tools to absorb liquidity from the market. Higher interest rates boost the return on the local currency and usually lead to higher exchange rates. As the currency strengthens, the cost of imported goods decreases.
Bitcoin, which has a programmed or fixed monetary policy, provides variation, especially for turbulent economies. The pace of expansion of cryptocurrency .supply is reduced by 50% every four years through a programmed code that reduces the mining bonus.
The historic volatility of the lira over 90 days. is now much higher than single-digit readings of major paper currencies such as the euro, pound, and yen. However, it is still less volatile than meme cryptocurrencies such as dogecoin and Shiba Inu.
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