In the realm of cryptocurrency, a recent post by Kaiko on X (formerly known as Twitter) brought attention to a noteworthy occurrence: the Turkish Lira has risen to prominence as the leading fiat trading pair on Binance, constituting 75% of the total exchange volume in the early days of September. This remarkable shift has eclipsed the trading volumes of other fiat pairs, including the Euro (EUR) and the Brazilian Real (BRL).
When we compare this current situation to January 2021, it becomes clear that the dynamics have undergone a complete transformation. The Turkish Lira stands out as the only fiat trading pair that has experienced a rapid increase in its market share, while the shares of EUR and BRL have gradually declined over time.
Meanwhile, on local Turkish exchanges, there have been notable fluctuations in trading volumes over the past week. Platforms like Paribu and Icrypex have seen a slowdown in their uptrend, whereas the other three exchanges have witnessed significant improvements. These exchanges have been consistently processing daily trading volumes ranging from $40 million to $65 million.
Crypto on the Rise: Unpacking Turkey’s Growing Dependence
Turkey has found itself grappling with one of the most severe economic crises, primarily fueled by skyrocketing inflation, which recently soared to nearly 60%. This unexpected surge in inflation underscores Turkey’s enduring struggle with the high cost of living. Despite the efforts of the new economic team appointed by President Recep Tayyip Erdoğan in June to unravel long-standing unconventional policies, immediate relief has remained elusive.
As inflation continues its upward trajectory, an interesting trend has emerged: Turkish citizens are increasingly turning to cryptocurrencies as a potential refuge. However, this shift has raised concerns, as having 75% of trading volume concentrated within a single economy is typically viewed as an unhealthy sign in the crypto market. It highlights the uneven adoption of cryptocurrencies on a macroeconomic scale and could become precarious if regulatory changes are introduced in the region.
Nonetheless, investors have been seeking solace in the world of crypto. A recent survey conducted by KuCoin revealed that over half of the Turkish population has ventured into this asset class. Notably, the percentage of crypto investors among Turkish citizens aged 18 to 60 has surged by 12% over the past 18 months. Looking back, the report underscores the significant growth of crypto investments among Turkish adults, which has increased from 40% to 52% in the same 18-month period. Considering these developments, the report suggests that,
“This indicates an increasing interest and acceptance of crypto as a hedge against inflation, especially with the Turkish lira losing over 50% of its value against the US dollar.“