Despite the global crackdown on cryptocurrency assets, demand for Tether (USDT) has remained strong in Turkey since early May. A recent report from Bloomberg has noted that the Turkish Lira has underperformed compared to big cryptocurrencies.
The long-serving Turkish President, Recep Tayyip Erdogan, was re-elected and the national fiat currency fell 11% against the dollar last week as the central bank reduced its intervention. Although the Turkish currency received support from state institutions on Wednesday after experiencing its biggest drop in nearly a year.
Turkish citizens have been attracted to crypto assets, mainly stablecoins such as the US dollar-pegged Tether, following the Lira’s 80% drop in value since the 2018 election and 20% devaluation against the dollar in 2023 only. According to Kaiko, Lira transactions peaked at 18% in May before falling to 10% of overall crypto trading volume at the start of June.
Tether Becoming More Popular
Ebru Güven, a former banker and current university professor, explained that stablecoins are an effective tool for consumers to safeguard their purchasing power in the face of excessive inflation. Güven mentioned that buying dollars or gold is more difficult due to government-imposed restrictions.
Research shows that Tether’s market share on Turkey’s leading cryptocurrency exchange, Btcturk, has increased to 20%. This is a substantial improvement compared to Binance, the largest digital asset exchange by trade volume.
According to a Kaiko analyst, Dessislava Aubert, the Turkish market’s interest in stablecoins remains strong despite low volumes. Aubert mentioned that last month, the percentage of local market trading volumes associated with Tether was the most significant since 2020.
Compiled by Coinbold