The Turkish lira (TRY) plunged to an unprecedented low against the dollar following the unexpected arrest of Istanbul mayor Ekrem Imamoglu, who is also a key rival of President Recep Tayyip Erdogan.
The currency dropped significantly, reaching nearly 41 per U.S. dollar, marking a 10% decline in just one day. This volatility led to a notable increase in trading activity for the bitcoin-lira (BTC/TRY) pair on the prominent cryptocurrency exchange Binance.
Imamoglu’s party, the Republican People’s Party (CHP), characterized the arrest as an attempt to undermine the will of the electorate. The party was preparing for a primary election the following week, where Imamoglu was anticipated to be the frontrunner for the presidential nomination.
During the time from 7:00 to 8:00 UTC on Binance, a total of 93 BTC were traded in the BTC/TRY pair, as reported by TradingView. This represented the highest hourly trading volume in over a year.
However, when comparing exchange rates, BTC was considerably undervalued against prices seen on Coinbase (COIN).
It appears that traders may have sold BTC/TRY to reallocate funds into dollar-pegged assets like USDT, the leading stablecoin. Efforts to obtain a comment from Binance were made.
Fluctuations in fiat currency are not uncommon in Turkey and have historically driven interest towards hard assets such as gold, as well as alternative investments like stablecoins and cryptocurrencies. The lira has shown a consistent decline since at least 2017, when it traded at 3.53 to the dollar.