The week has begun on an fascinating notice, with the U.S. greenback crashing to three-year lows alongside losses on Wall Avenue, but bitcoin, which often follows the sentiment on Wall Avenue, stands tall.
This might simply be the start.
The shift away from the USD and towards seizure and censorship-resistant belongings like BTC and stablecoins might speed up if President Donald Trump follows by together with his reported plans to fireside Federal Reserve Chairman Jerome Powell, which have pushed the DXY and U.S. inventory markets decrease at this time.
That is the lesson from Turkey, which has seen its foreign money, the lira (TRY), collapse through the years primarily attributable to President Recep Tayyip Erdogan’s repeated interference within the central financial institution’s operations. The sliding lira has triggered a capital flight into BTC and stablecoins since at the very least 2020-21.
Trump’s points with the Fed
Trump has feuded publicly with the Federal Reserve and its chairman, Jerome Powell, for years, criticizing Powell for being too late on charge cuts even throughout his first time period when rates of interest have been approach decrease than at this time.
Nevertheless, Trump’s criticism has lately reached a fever pitch with studies suggesting he’s searching for methods to do away with Powell, who lately warned of stagflation even because the President reiterated requires decrease borrowing prices whereas suggesting there isn’t any inflation.
Powell’s affected person strategy follows a commerce war-led spike in survey-based measures of inflation expectations, which might at all times grow to be self-fulfilling.
Nonetheless, on Monday, Trump went additional, calling Powell a “major loser” and warning that the financial system might decelerate except rates of interest are instantly lowered.
Lesson From Turkey
Erdogan started interfering within the central financial institution’s operations in 2019, and since then, the lira has collapsed sevenfold from 5.3 per greenback to 38 per greenback.
It began with Turkey’s inflation charge reaching double digits in 2017. It remained elevated within the subsequent 12 months, which prompted the nation’s central financial institution to extend the one-week repo charge from 17.5% to 24% in September 2018.
The transfer probably did not go properly with Erodgan, who issued the primary decree dismissing Central Financial institution of Turkey (CBT) governor Murat Cetinkaya in July 2019. From then on till the top of 2021, Erdogan issued a number of decrees dismissing and hiring a number of CBT officers. Amid all this, inflation remained elevated, and the lira continued to depreciate at an alarming charge.
“We certainly don’t believe in high interest rates. We will pull down inflation and exchange rates with low-rate policy … High rates make the rich richer, the poor poorer. We won’t let that happen,” Erdogan mentioned in 2021.
As of 2025, Turkey faces an inflation charge of practically 40%, in response to knowledge supply TradingEconomics.
This episode serves as a cautionary story for Trump, highlighting that tampering with central financial institution independence — particularly within the face of looming inflation — can erode investor confidence and ship the home foreign money right into a tailspin.
This doesn’t essentially imply that the USD will crash precisely like lira however might even see vital devaluation.
Maybe it might show much more destabilizing for international markets, contemplating the greenback is a world reserve foreign money, and the U.S. Treasury market is the bedrock for worldwide finance.
If higher sense fails to prevail, U.S. buyers could really feel incentivized to maneuver away from U.S. belongings and into BTC and different various investments, simply as Turks did.
