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Despite the growing international crackdown on cryptocurrencies, Turkish investors have sought the security of stablecoin Tether (USDT) since early May, according to Bloomberg. The Turkish lira has lost more value than other major cryptocurrencies, despite price drops in other major cryptocurrencies.
The national fiat currency lost 11% of its value versus the US dollar during the last week as a result of the central bank’s reduced intervention attempts in the wake of President Recep Tayyip Erdogan’s victory. Following the lira’s biggest loss in almost a year, Turkish state banks renewed assistance on Wednesday.
Turkish residents have turned to cryptocurrencies, notably stablecoins like Tether, which is tethered to the US dollar, as a result of the lira losing 80% of its value since the previous election in 2018 and decreasing by 20% against the dollar in 2023 alone. Lira transactions peaked at 18% in May, according to Kaiko statistics, and made up 10% of all cryptocurrency trading volumes in early June.
The advantages of investing in stablecoins were stressed by Ebru Güven, a former banker and university instructor, stating, “Investing in stablecoins allows people to preserve the value of their wealth. It’s one of the ways to retain some value when inflation is this high.” Güven also noted that regulations have made it challenging to purchase dollars or gold.
The article also notes that Tether now accounts for 20% of trade volumes on Btcturk, the top domestic cryptocurrency exchange. According to data from Coinmarketcap, Tether only makes up 1% of trading volumes on Binance, the largest digital asset exchange in the world by trading volume.
Kaiko Analyst Dessislava Aubert commented, “It’s noticeable that despite historically low volumes, demand for stablecoins on Turkish markets has remained robust,” According to Aubert, Tether’s percentage of trade volumes on local markets rose to its highest level since 2020 last month.
Stablecoins like Tether give Turkish investors a way to keep their capital steady and valuable in the face of severe inflation, while the Turkish market deals with significant economic uncertainty and restrictions on conventional safe-haven assets. Tether has established itself as a pillar of stability in the Turkish market, providing investors seeking safety in difficult times with a dependable and accessible haven despite the global assault on cryptocurrencies.