Turkish traders piled into PEPE and bitcoin as lira collapsed

Turkey’s currency, the lira, has tanked by 25% against the US dollar since April, and by more than 80% over the past five years. Memecoin PEPE has apparently offered salvation to some.

Stablecoins like tether (USDT) — and even bitcoin (BTC) — have historically been obvious hedge picks, at least in terms of crypto.

But over the past two months, lira holders on Binance have triggered $682 million worth of PEPE trades, ranking the froggy joke coin fourth for lira volume on the platform across that period.

Bitcoin, which came in third place, saw only one-fifth more volume over that time. Ether (ETH) came a distant seventh with $223 million.

Dollar-pegged tokens USDT and Binance’s soon-to-be-defunct branded stablecoin BUSD were the most traded between Apr. 26 and Jun. 26, with $5.2 billion and $1 billion, respectively. 

Blockworks looked at the 97 lira markets currently hosted by Binance for the purposes of this analysis, based on TradingView data. 

Some volume may be attributed to market makers and other high-frequency crypto trading algorithms. Other exchanges servicing lira trades include BTCTurk and Bitfinex.

Still, why so much PEPE for Turkish lira traders? 

A weird wrinkle in the universe meant that PEPE — which had sunk up to 80% in the weeks following its May record high — bounced hard as the Turkish lira crashed to new record lows this month.

Turkish lira holders clearly sought to capitalize on PEPE’s recovery in the days leading up to the lira’s most-recent crashes. Binance’s PEPE-lira volumes spiked to $41 million last Wednesday (Jun. 21) as PEPE more than doubled, up from $9 million one day earlier. That worked out to be about 37% of global PEPE volume, per CoinGecko.

The Turkish central bank hiked interest rates from 8.5% to 15% the next day (Jun. 22), sending the lira downward 7% against the US dollar. Meanwhile, Lira-PEPE volumes jumped another 50%, reaching $61.5 million — more than double bitcoin’s lira volume.

PEPE was second only to USDT on that day for Binance’s lira traders, making up 12% of total lira volumes. Overall, Binance processed more than half a billion dollars in Turkish fiat trade on Jun. 22.

Whether lira holders actually intended to hedge against devaluation with PEPE remains unclear.  Still, PEPE-lira volumes also spiked on Binance earlier in the month, on Jun. 7, when the lira slipped 7% after its newly-elected government flagged intent to relax stabilization measures. 

PEPE was the fifth-most traded cryptocurrency with lira on that day, with $11.9 million, behind peer-to-peer software engineering token radicle (RAD), BTC, BUSD and USDT.

Fan tokens also a big hit

In total, Binance has reported handling $89 billion in lira-crypto trade volumes over the past year, with another memecoin, shiba inu (SHIB), the fourth-most traded at $3.1 billion, ahead of ETH’s $2.5 billion. 

SANTOS, the fan token for the Brazilian football club of the same name, trailed just behind ether with $2.47 billion, followed by apex joke token dogecoin (DOGE). 

• 36% of Binance’s lira volume over the past year featured stablecoins.
• 11% involved bitcoin or ether.
• 6.5% was memecoins (DOGE, SHIB, FLOKI or PEPE).

In fact, fan tokens seem to be popular among Turkish lira holders. ALPINE (the F1 racing team), PORTO (FC Porto) and LAZIO (SS Lazio) were all in the top 20 for lira volume on Binance over the past year. 

Impressive, considering those all have market caps under $20 million. The lira trade for those fan tokens on Binance respectively contributed between 22% and 37% of global volumes (as reported by CoinGecko) over the year, during which time they’ve returned between 1% and -24%.

Chiliz (CHZ), the native token for fan token platform Socios, came in ninth over the year, with almost $1.7 billion.

So, aside from stablecoins, have any of the most traded cryptocurrencies against the lira on Binance actually hedged against currency devaluation? 

Narrowing the scope to just the top 20 most traded tokens shows that on average, those cryptocurrencies jumped around 12%.

But 39 out of the 95 fell more than 36% over the past year — performing worse than the lira against the US dollar — including algorand (ALGO), NEAR and solana (SOL). 

That works out to be around a 40% success rate at hedging against lira’s devaluation via Binance.

---

Get the news in your inbox. Explore Blockworks newsletters:

• Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
• Empire: Start your morning with the top news and analysis to inform your day in crypto.
• Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
• 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
• Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
• The Drop: For crypto collectors and traders, covering apps, games, memes and more.
• Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.