Some residents of Turkey have reportedly revived their interest in the cryptocurrency market, more specifically in the stablecoin USDT, following a new decline in their national currency and fears that severe inflation could start looming again across the country.
The downtrend of the Turkish lira (which has been evident in the past few years) intensified shortly after Recep Erdogan won the presidential elections, securing himself another five years as the political leader. He is known as a fierce critic of digital currencies, whereas his opponent Kemal Kilicdaroglu (who collected two million votes less than Erdogan) shared pro-crypto views.
Turks Turn to Crypto
According to recent Bloomberg coverage, residents of the Eurasian country have shifted their focus towards the largest stablecoin by market capitalization – USDT – at the beginning of May, ahead of the presidential elections. The interest has remained high even after their completion, which saw Erdogan win by getting 52% of the votes.
One possible factor pushing the people of Turkey toward the cryptocurrency industry could be the depreciating national currency that recently hit a record low against the American dollar. Currently, 1 TRY equals $0.042, whereas it was worth approximately $0.15 at the beginning of 2020 (at the start of the global COVID-19 pandemic).
USDT has turned into a safe haven for some locals who try to preserve their wealth amid the worrying inflationary environment. The asset maintains a consistent peg with the US dollar, and it provides a relatively safe and simple way in which Turks can join the crypto sector.
On the other hand, domestic regulators have restricted the purchase of dollars and even gold with the lira, giving crypto a more notable status. Ebru Güven – university lecturer and former banker – shed more details:
“Investing in stablecoins allows people to keep the value of their wealth; it’s one of the ways to hold on to some value when inflation is this high. This is the only motivation for people to buy stablecoins right now.”
Response From the Locals
Concerned about the lira’s condition, some Turkish residents have distributed all their savings into the cryptocurrency market. One example is the 28-year-old graphic designer – Batuhan Basoglu – who revealed:
“Just before the election, I felt the urge to convert my Turkish lira to US dollars due to the uncertainty surrounding the currency’s future. To safeguard myself against this risk, I purchased Tether.”
Data presented by the cryptocurrency analytics provider – Kaiko – showed that USDT trading volume on BtcTurk spiked at the end of May (when Erdogan won the Presidential elections).
USDT trading volume on BtcTurk, Source: Kaiko
Dessislava Aubert – an analyst at the company – told Bloomberg that the last time Turks were so intrigued by the stablecoin was in 2020.
“It’s noticeable that despite historically low volumes, demand for stablecoins on Turkish markets has remained robust,” she added.
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