Media note on rise of Bitcoin and Tether in Turkey as the lira falls

In Q4 2021, against the backdrop of the Turkish lira’s decline, daily volumes of fiat-backed cryptocurrency trading on three major platforms rose to an average of $1.8 billion per day, according to The Wall Street Journal.

That figure surpassed the levels seen in any of the previous five quarters.

Among Turks, Tether has proven the most popular. According to CryptoCompare, in the autumn the lira became the most traded currency against the stablecoin, ahead of the dollar and euro.

Since September, the Turkish currency has fallen 40% against the dollar; Bitcoin, by November, had gained 40%, but subsequently retraced by more than 10%.

“A nonsensical policy on interest rates, eroding confidence in inflation statistics, and political decisions have made cryptocurrencies a safe haven, though they remain somewhat risky and volatile financial assets,” explained the 27-year-old trader Kagan Shenai to the publication.

Adoption by Turks continues despite the central bank ban on their use as a means of payment, said Turan Sert, adviser to the Paribu exchange. He noted that the government promised to present a law regulating digital assets, but it remains unclear what its consequences will be.

Turkish investors view stablecoins not only as a store of value but also as a gateway to more volatile coins, including Bitcoin and Ethereum, says Esra Alpay, Bitlo’s marketing director. According to her, the platform saw a sharp influx of traders in the last quarter of the year.

“The volatility of the lira and the price increases seen in recent months have led our investors to view cryptocurrencies as long-term growth assets and as a hedge against inflation in the short term,” she added.

Earlier, President Recep Tayyip Erdogan said authorities and the central bank would fight a war against cryptocurrencies.