bitcoin and turkish lira -

Altcoins Compete With Bitcoin in Inflation-Ridden Turkey as Lira Plummets

Bitcoin’s role as an inflation hedge can be compared to altcoin speculation, and U.S. dollar exposure via tether.
Turkey’s citizens are facing high inflation and a plummeting currency. They are refusing to follow the lead of foreign public companies that have used bitcoin as a store/of-value asset. Instead, they are turning to alternative cryptocurrency like the stablecoin USDT and shiba Inu (SHIB).

Bitcoin vs Turkish Lira

The trading volume in the bitcoin/Turkish currency pair on crypto exchange Binance was $918 million in November. This is less than a fifth of the shiba-lira value at $5.26 billion and the tether-lira level at $5.58 billion, respectively.

Strahinja Savic (head of data and analytics at Toronto’s crypto platform FRNT Financial) stated in an email that “the data shows despite instability faced by the lira,”.

The lira fell nearly 40% against the dollar in November after the central bank cut interest rates, despite inflation exceeding 20%, and the U.S. Federal Reserve started to reduce its liquidity-boosting, asset purchase program. This year, the currency has seen a 87% decline and is expected to drop for its ninth consecutive year.

“The official inflation number is 21% but at the ground level it is closer to 50%,” Sabri Aygun from Istanbul, a textile specialist and crypto investor.

In such circumstances, demand for nearly everything priced in local currency, even gold, increases.

Altcoins in Demand

Aygun stated that the priority of Turkish citizens is to have gold and dollars. They also buy crypto coins cheaply like SHIB, VET and XRP, as BTC is too expensive.

SHIB is extremely cheap due to its huge supply of 1 quadrillion tokens. At press time, SHIB/TRY was trading at 0.00049 Liras on Binance while BTC/TRY was changing at 686.580 Liras.

Crypto payments are illegal in Turkey. However, it is legal to own crypto. The growing popularity of tether, and other cryptocurrency, may attract regulatory ire. This is because increased capital flight through non-banking channels could increase the lira’s pain.

Cheap altcoins are not just attractive to Turkey. SHIB and smaller coins are being considered by retail investors in India and around the world as leverage options for bitcoin. Shiba Inu, the self-described dogecoin killer has risen by nearly 380% in dollar terms in this quarter. According to TradingView, bitcoin gained only 8%.

According to Savic of FRNT, traders in Turkey may be using tether to proxy for dollar exposure. The world’s most valuable stablecoin, Tether, is said to be backed by a large number of reserves and has a 1:1 peg with the dollar. It is widely considered to be a digital representation for the dollar, which can be transferred freely across borders and exchanges without having to use traditional banking channels.

Ercan Bozoglu from Turkey, who is based the Netherlands, stated that he holds USDT because it is quick and cheap to send USDT across various exchanges. Also, you can swap between spot and futures,” Ercan Bozoglu said. “Turks are mainly interested in cheap alternative currencies, so they take advantage at 2x and can redraw (less fees cost).

Aygun stated that the younger generation is more interested than USD and gold in crypto, but is financially dependent upon their family. Another local trader confirmed this fact by saying, “My father won’t allow me to buy crypto.”