- The falling Turkish lira, coupled with restrictions on dollar and gold purchases, has prompted Turkish residents to seek stability in USDT.
- The interest in the cryptocurrency market, especially in USDT, surged ahead of the presidential elections and has remained strong despite Recep Erdogan, a critic of digital currencies, winning the presidency.
Turkish citizens are increasingly pivoting towards the stablecoin USDT, as a persistent decline in their national currency heightens fears of an imminent resurgence of severe inflation across the country.
The Turkish lira’s longstanding downtrend, which has worsened since the re-election of President Recep Erdogan, has been a significant trigger for this shift in the investment mindset of the country’s populace. Erdogan, a staunch critic of digital currencies, secured another five-year term in office, thereby intensifying uncertainty around the country’s economic future. His main opponent, Kemal Kilicdaroglu, who lost the elections by two million votes, had expressed pro-crypto sentiments.
As reported by Bloomberg, the interest in USDT, the most significant stablecoin by market capitalization, surged among Turkish residents in early May, preceding the presidential elections. This trend has persisted post-elections, despite Erdogan securing 52% of the votes.
The plummeting value of the national currency, recently hitting a record low against the US dollar, is thought to be the primary driving force steering Turks towards the crypto industry. Currently, 1 TRY equates to a meager $0.042, a significant depreciation from around $0.15 at the start of 2020, during the onset of the global COVID-19 pandemic.
With regulators imposing stringent restrictions on the purchase of dollars and gold using lira, cryptocurrencies like USDT have gained prominence as a stable asset for wealth preservation amidst the escalating inflationary pressures. USDT’s consistent pegging to the US dollar provides Turkish citizens with a relatively safe and straightforward route into the crypto sector.
Ebru Güven, a university lecturer and former banker, commented,
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“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.”
In light of the lira’s precarious condition, many Turkish citizens have chosen to convert their savings entirely into cryptocurrencies. For instance, Batuhan Basoglu, a 28-year-old graphic designer, disclosed,
“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 from cryptocurrency analytics provider, Kaiko, revealed a significant spike in USDT trading volume on BtcTurk at the end of May, around Erdogan’s election win. According to Dessislava Aubert, an analyst at Kaiko,
“It’s noticeable that despite historically low volumes, demand for stablecoins on Turkish markets has remained robust.”
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