Recently, I revisited a quite interesting phenomenon—whenever the Turkish lira falls into crisis, the crypto market experiences a clear risk-off wave. This actually reflects a bigger issue: when traditional fiat currencies fail, how do people protect their wealth?

Speaking of the lira’s devaluation, it’s truly been a series of waves over the years. Starting from the COVID-19 impact in 2020, Turkey has been in a continuous currency crisis. That year, the lira broke the 7-to-1 mark, and Bitcoin trading volume increased from an average of 43.79 BTC daily in July to over 60 BTC in August. By November, the lira further fell to 8.43 per dollar. Throughout 2020, the lira depreciated nearly 26%, but during the same period, Bitcoin surged 303%, soaring from $7,194 at the start of the year to $28,990 by year’s end.

What’s truly impressive is the 2021 central bank crisis. In March, the central bank governor was suddenly dismissed, causing the market to crash, with the lira plummeting 17% in a single day. During that period, BTC/Lira trading pairs on crypto exchanges saw continuous volume growth, and Google search data showed a 566% surge in Bitcoin searches in Turkey. By November, when the government refused to raise interest rates to combat inflation, the lira again dropped over 15% in a single day, with BTC/Lira daily trading volume soaring to 873.52 BTC. That year, the lira depreciated about 82%, from 7.43 at the start of the year to 13.50 at year’s end.

2022 was even worse. Turkey’s inflation rate soared to its highest in 20 years, exceeding 85%. The lira fell below 18 per dollar, depreciating 39% over the year. Interestingly, despite Bitcoin’s bear market dropping 64% that year, Turkish investors remained unusually active, with DOGE trading volume even surpassing the combined volume of BTC and ETH. What does this tell us? People simply didn’t care about government warnings—they wanted to use crypto assets to hedge against inflation.

After the 2023 elections, the lira still showed no signs of recovery, falling to 29.5 per dollar by year’s end, a 58% depreciation. But during that period, Bitcoin’s global price rose 58%, and in Turkey, the increase was as high as 78%, due to the lira’s depreciation stacking with BTC’s rise. In June, the daily BTC/Lira trading volume on exchanges reached 502.9 BTC.

Entering 2024, the lira’s depreciation momentum continued, falling below 35 per dollar in October. Meanwhile, Bitcoin briefly dropped to $58,000, but by the end of the year, thanks to clearer U.S. policies and bullish crypto markets, it repeatedly broke above $100k. In mid-December, the daily BTC/Lira trading volume on exchanges hit 123.23 BTC.

Actually, Turkey’s story isn’t an isolated case. Venezuela’s inflation rate in 2024 remains high at 60%, with Bitcoin and stablecoin trading volumes surging—cryptocurrencies now account for 9% of the country’s annual remittances. Argentina’s inflation rate in 2024 hits 276%, with Bitcoin becoming an important tool to hedge against the peso’s devaluation. The country’s crypto trading volume reached $91.1 billion, surpassing Brazil to become Latin America’s most active market.

The logic behind this is quite clear. Bitcoin, due to its decentralization, fixed supply of 21 million coins, and censorship resistance, is seen as “digital gold,” suitable for long-term wealth preservation. Stablecoins, being pegged to the dollar, offer price stability and are more suitable for short-term trading. In countries facing currency crises, these two form a complementary system—Bitcoin for long-term inflation hedging, stablecoins for short-term liquidity needs.

Of course, cryptocurrencies can’t solve the fundamental economic problems. But in hyperinflation and lira crises, they do provide individuals with practical solutions for wealth preservation and transactions. Perhaps this is part of the future financial ecosystem—when traditional currencies fail, people will have new options.