In short: Turkish investors are turning to stablecoins, especially US dollar-pegged tether, as the Turkish lira depreciates against the dollar. With regulations making it difficult to acquire dollars or gold, investing in stablecoins helps Turks hold on to the value of their wealth in a time of high inflation. The demand for tether has remained strong in Turkey despite the global crackdown on crypto assets. Tether's share of trading volumes on a leading domestic exchange, Btcturk, has reached 20% compared to only 1% on Binance, the world's largest digital asset exchange.
Our quick analysis:
As the Turkish lira continues to slide against the US dollar, investors in Turkey have been seeking refuge in stablecoins, particularly the US dollar-pegged tether (USDT). With the lira having lost 80% of its value since the previous election in 2018, and down 20% against the dollar in 2021 alone, Turks have been turning to cryptocurrencies to hold their value while inflation remains high.
Despite a global crackdown on cryptocurrencies, demand for tether has been high in Turkey, with its share of trading volumes on local markets reaching its highest level since 2020 last month. Stablecoins offer investors a way to keep the value of their wealth as the lira continues to depreciate, which is why, despite historically low volumes, demand for stablecoins on Turkish markets has remained resolutely robust.
The situation has been further compounded by tightening regulations, which have made it hard for Turkish investors to buy dollars or gold; this has increased demand for stablecoins, especially tether. With tether’s share of trading volumes on leading domestic crypto exchanges reaching 20%, compared to just 1% on global exchanges like Binance, it’s notable how much of a preference Turkish investors have for US dollar-pegged cryptocurrency.
However, with inflation still a major threat in Turkey and a government intervention unlikely to stabilize the lira anytime soon, the question is whether Turkish investors will continue to buy tether as a hedge against inflation, or if they will look elsewhere for investment opportunities.
What do you think the future holds for Turkish investors and tether? Share your thoughts on the subject in the comments section below.
Image provided by Unsplash
Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
Our quick analysis:
As the Turkish lira continues to slide against the US dollar, investors in Turkey have been seeking refuge in stablecoins, particularly the US dollar-pegged tether (USDT). With the lira having lost 80% of its value since the previous election in 2018, and down 20% against the dollar in 2021 alone, Turks have been turning to cryptocurrencies to hold their value while inflation remains high.
Despite a global crackdown on cryptocurrencies, demand for tether has been high in Turkey, with its share of trading volumes on local markets reaching its highest level since 2020 last month. Stablecoins offer investors a way to keep the value of their wealth as the lira continues to depreciate, which is why, despite historically low volumes, demand for stablecoins on Turkish markets has remained resolutely robust.
The situation has been further compounded by tightening regulations, which have made it hard for Turkish investors to buy dollars or gold; this has increased demand for stablecoins, especially tether. With tether’s share of trading volumes on leading domestic crypto exchanges reaching 20%, compared to just 1% on global exchanges like Binance, it’s notable how much of a preference Turkish investors have for US dollar-pegged cryptocurrency.
However, with inflation still a major threat in Turkey and a government intervention unlikely to stabilize the lira anytime soon, the question is whether Turkish investors will continue to buy tether as a hedge against inflation, or if they will look elsewhere for investment opportunities.
What do you think the future holds for Turkish investors and tether? Share your thoughts on the subject in the comments section below.
Image provided by Unsplash
Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
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