Turkish citizens are turning to cryprocurrencies amidst growing economic challenges. According to reports, more Turks are renewing their interest in crypto as the economy bites harder, especially as the Turkish Lira continues to lose value.
Over the past years, the Turkish Lira has depreciated in value to a great extent, reaching up to 85% decline. This followed poor economic policies that have thrown the country into abject poverty, at which time the citizens started turning to cryptocurrencies, especially Bitcoin.
This time around however, Turks are showing the most interest in the biggest stablecoin by market cap, USDT. The interest in crypto is also fueled by the overwhelming concern about looming inflation that is expected to engulf the country.
Turkey’s leader, Recep Erdogan has been in power in the years that the Lira has depreciated, but is known for his anti-crypto stance. This has not deterred the citizens from pursuing cryptocurrencies however, as they see no other way out of there economic quagmire.
This is because cryptocurrencies have over the years proven to be viable stores of value. Looking at bitcoin for instance, the cryptocurrency popularly known as digital gold has appreciated to $60,000 last year before a crash.
Despite the volatility that characterizes cryptocurrencies, they seem to appreciate over time, compared to fiat currencies such as the Turkish Lira.
Using USDT as a Hedge
Stablecoins are by design less volatile than conventional cryptocurrencies. This does not take away the speed of their transactions which also characterizes cryptocurrencies. As a result, using the Lira to buy USDT will ensure that inflation doesn’t affect the value of the money since the value of USDT is fixed at roughly $1.
The Lira recently hit a record low value against the US Dollar, which has increased concerns around the inflation that has ravaged the country for years. Using the stablecoin therefore is a strategy to preserve income at roughly the same value as the USD.
USDT is popular not just in Turkey but in other countries as well, especially in countries where there is major inflation causing depreciation of the local currency against the USD. With its fixed value, it is expected to rescue them from local inflation.
Increasing Interest in Crypto
Cryptocurrencies have come a long way, and though they faced a lot of resistance at first, there is general increasing interest in the industry now. This is evident by the attention of institutional investors that the industry is getting.
Even mainstream financial institutions are now embracing crypto, because of the potentials the assets show. Recently, Russian banking giant Sberbank announced it will be giving its customers access to cryptocurrencies. This is not the first bank to start providing crypto services to customers and certainly won’t be the last because the industry is growing quite fast.
Also because fiat currencies like the Turkish Lira are designed to suffer inflation, people are starting to realize that cryptocurrencies are a better store of value rather than holding fiat currencies. Like the Turkish people, more of the world will soon be turning to crypto as they come to realize that their fiat currencies are not to be trusted.
If the concern is the volatility of crypto, stablecoins like USDT serve perfectly as a stable currency that holds their money in roughly the same value as the USD.
