Turkey Crypto Boom After Lira Falls

What Has Happened?

NakitCoins, a cryptocurrency exchange situated just off Istiklal Boulevard, Istanbul’s central pedestrian promenade, draws the attention of the occasional tourist who stops to gaze at a screen in the window that shows the prices of numerous cryptocurrencies. Despite a recent history of scandalized exchanges, only a few people enter the shop. Still, the brick-and-mortar exchange, which allows them to buy and sell Bitcoin and other cryptocurrencies, serves as a physical example of how the faltering Turkish lira is propelling the popularity of virtual cryptocurrencies in Turkey.

Over the years, interest in cryptocurrencies has increased among Turks, as it has among the rest of the world. However, Turkey’s recent economic turmoil has inspired millions of curious onlookers to invest in Bitcoin, Ethereum, and other cryptocurrencies. Even though their values are vulnerable to significant and violent price changes, new converts are drawn to cryptocurrencies for more than just the financial possibilities they provide. They see cryptocurrencies as a viable store of value to preserve their assets at a time when the Turkish lira has been battered by devaluations that have seen the currency lose more than 40% of its value in the past year alone.

Turkey’s Crypto Boom

This came when President Recep Tayyip Erdogan abruptly fired the head of the country’s central bank, causing the lira to plummet in value last year. In April, crypto volumes started to decline due to the central bank’s prohibition on cryptocurrencies as payment methods. In late April, two Turkish cryptocurrency exchanges, Thodex and Vebitcoin, went bankrupt, wiping out the assets of hundreds of thousands of consumers and causing considerable harm to the Turkish cryptocurrency business as a result. However, the crypto boom resurfaced in the latter months of last year, with trade volumes exceeding one million per day, following a series of central bank interest-rate cuts in the face of rising inflation, which caused the value of the Turkish lira to plummet, which resulted in the lira’s value plummeting as well.

Billboards and television advertising progressively encourage the general public to participate in the cryptocurrency market. Current Bitcoin values are shown alongside the US dollar and the euro on most television stations, among other currencies. According to Turkey’s most significant online crypto exchange, the greater awareness demonstrates how cryptocurrency quickly replaces foreign cash or traditional stores of value such as gold as a hedge against a local currency whose value is clouded by uncertainty.

Growth Through Scrutiny 

According to the Turkish Directorate of Religious Affairs, cryptocurrency has no intrinsic value, is too hidden, and is vulnerable to abuse by criminal networks. Despite the fact that the sudden collapse of the Thodex and Vebitcoin cryptocurrency exchanges last year triggered criminal charges and a flood of news stories about how the crypto craze duped Turks, cryptocurrency trading has exploded in popularity in Turkey amid a financial crisis that saw the lira’s value halve last year and inflation recently reach a two-decade high. The rising scepticism against government remedies demonstrates that cryptocurrencies are the best alternative for Turkey’s troubled currency. Turkey’s parliament is working on laws to regulate cryptocurrency exchanges, generating consternation among cryptocurrency enthusiasts. Some are concerned about overregulation in a free-spirited industry. Others say that minimal regulation is necessary to protect consumers.