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- The Turkish lira has underperformed compared to major cryptocurrencies.
- There has been a surge in interest among Turks for crypto assets, especially stablecoins.
In spite of a worldwide crackdown on cryptocurrency, the demand for tether (USDT) has remained strong in Turkey since early May. A recent report from Bloomberg highlights that the Turkish lira has significantly underperformed relative to major cryptocurrencies.
President Recep Tayyip Erdogan, who has been in power for a long time, was reelected. Additionally, the national fiat currency experienced an 11% decline against the dollar in the past week as the central bank reduced its intervention efforts. Following the largest drop in nearly a year, state institutions provided support to the Turkish currency on Wednesday.
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Turks have increasingly turned to crypto assets, particularly stablecoins such as the U.S. dollar-pegged tether, as the lira has lost 80% of its value since the last election in 2018 and has decreased by 20% against the dollar in 2023 alone. According to Kaiko, lira transactions peaked at 18% in May, and by early June, they represented only 10% of total crypto trading volumes.
Tether Adoption on the Rise
Ebru Güven, a former banker and current academic, stated that stablecoins serve as a means for consumers to safeguard their purchasing power amid rampant inflation. Güven also pointed out that acquiring dollars or gold has become more challenging due to government-imposed restrictions.
Research indicates that tether’s market share on Btcturk, a prominent cryptocurrency exchange in Turkey, has increased to 20%. This marks a notable improvement compared to Binance, the largest digital asset exchange by trading volume.
Dessislava Aubert, an analyst at Kaiko, mentioned that despite unusually low trading volumes, the interest in stablecoins within the Turkish market has remained elevated. She also noted that the proportion of local market trading volumes attributed to tether last month was the highest it has been since 2020.
