The Turkish lira fell sharply following the arrest of Istanbul Mayor Ekrem İmamoğlu, sending investors scrambling for alternative assets. As the lira tumbled nearly 10% against the U.S. dollar, trading volumes on Binance’s BTC/TRY pair surged to their highest level in a year.
İmamoğlu, a leading opposition figure and a potential challenger to President Recep Tayyip Erdoğan, was arrested on charges of terrorism and organized crime—charges his Republican People’s Party (CHP) categorically denies. His detention came just days before the CHP’s primary election, where he was expected to be named the party’s presidential candidate.
The arrest triggered immediate turmoil in Turkey’s financial markets. The lira initially hit a record low of 41 per U.S. dollar before recovering slightly to 38.74.
The BIST 100 stock index fell as much as 7% before stabilizing. Investors sought refuge in gold and cryptocurrencies as confidence in Turkey’s economic stability weakened.
Surging Crypto Trading
Binance’s BTC/TRY trading pair saw a dramatic spike in volume as traders rushed to move funds away from the lira. Data from TradingView showed that 93 BTC changed hands between 7:00 and 8:00 UTC, marking the highest hourly volume in at least a year.
Despite the trading frenzy, BTC/TRY prices traded at a discount compared to Coinbase, indicating that many traders used Bitcoin as an intermediary to shift funds into dollar-linked assets such as USDT. Binance has yet to comment on the trend.
Cryptocurrency and stablecoins have long been a hedge against the lira’s volatility. The Turkish currency has steadily declined since 2017, when it traded at 3.53 per dollar. The latest plunge underscores growing investor concerns over political risks and economic uncertainty.
Gold prices also surged as investors sought safe-haven assets. The price per gram exceeded 4,000 lira before retreating to 3,800 after the Central Bank of Turkey intervened. Market analysts warned that continued political instability could exacerbate currency depreciation, making alternative assets more attractive.
“Political turmoil in Turkey is fueling financial dislocations in assets,”
Said one financial expert. Another added,
“The lira’s decline is a clear reflection of the increasing political risks in the country.”
Meanwhile, broader currency markets reflected cautious sentiment. The euro initially spiked against the lira and showed declines against the dollar and pound, with EUR/USD down 0.6% to 1.0880 and GBP/USD down 0.3% to 1.2960. S&P 500 futures also dipped 0.2%, suggesting global markets were reacting to the unfolding situation in Turkey.
