Despite the current market collapse, interest in crypto remains high in Turkey. The country has been in the grip of a crypto craze for some time.
The Crypto Frenzy in Turkey
A good demonstration of this frenzy was a game between two leading soccer teams in the country, Besiktas, and Fenerbahce. To decide which team would start, the referee at the game tossed a coin bearing the Bitcoin logo, to the surprise of millions of fans around the world watching the game. Soon after, the Turkish Football Federation announced it was investigating the matter.
This incident is a good snapshot into the crypto frenzy in Turkey. The country is currently leading when it comes to cryptocurrency investments. Various television channels, and billboards all over the country feature crypto ads. These ads promise citizens they will get rich quickly if they invest in crypto.
Why The Crypto Frenzy ?
One reason for the crypto frenzy is the Lira losing most of its value. The Turkish national currency has been in free fall for a few months. Each day, it loses more of its value. In the past year, the Lira has lost half of its value to inflation, which hit a 20-year high of close to 70%. To protect themselves and their wealth, many Turks began to purchase as a way to defend their wealth from being wiped out by inflation.
In the past, when inflation was out of control, Turks would invest in hard assets such as gold, and real estate. However, the current generation views crypto as a better investment. One study found that over 5.6 million Turks held crypto accounts. When including friends and family, the figure jumps to around 12 million people who own crypto in the country.
In recent weeks, the state has taken steps to stop inflation, including restricting access to forex. However, these measures have been ineffective. One reason people prefer crypto as a store of wealth compared to property investments is that it is less complex. For one, when you invest in real estate, commissions, and fees complicate the process. In contrast, you can invest hundreds of dollars in crypto in just a few minutes.
Exchanges Mushrooming Everywhere
Several exchanges have been mushrooming all over Turkey to take advantage of the frenzy. One example of this is the Thodex Exchange, which is suspected of making away with $2 billion in investor funds after it suddenly shut down and left the country.
To stymie some of the interest in crypto, the Turkish central bank banned crypto transactions to pay for services and goods. However, the ban has not done anything to reduce interest in crypto. Some experts call for legislation to protect investors since the sector is unlikely to go away any time soon.
Summary
At least for the time being, it does not appear that interest in cryptocurrencies and blockchain technology will go away very soon. Because of the persistently high inflation rate in the nation, residents will most likely keep looking for new strategies to preserve the purchasing power of their assets.
