Crypto interest in Turkey is high, despite new regulations

Anders Nysteen

Senior Quantitative Analyst, Saxo Bank

Summary:  Turkey has been in the crypto spotlight over the past weeks after announcing a ban on crypto payments and after a collapse of two major crypto exchanges. Last Friday the sentiment changed slightly as the central bank governor stated that a total ban is not intended.


The crypto market in Turkey has been poorly regulated until now, and the past weeks have shown a consequence of this. In a week, two Turkish crypto exchanges have been collapsing, causing trading halts and freezing of accounts as the Turkish authorities are investigating potential fraud.

Prior to the collapse, the exchanges were experiencing a drastic boost in trading activity, triggered by the multiple factors. The heavy lira inflation (16 % year-on-year in March) and the instability of the lira have contributed to the crypto trading boost as traders seek to protect their assets. The trading surged significantly in the days after Erdogan replaced the central bank governor, causing the Turkish lira to decrease by more than 13 %.

It is well-known that some traders look to the crypto space in the search for shelter against inflation, despite the huge volatility associated with crypto investments (read more on cryptocurrencies and inflation here). One clear example is illustrated by looking at the trading volume of the cryptocurrency Tether, which is a stablecoin following the value of 1 US dollar. The crypto exchange BTCTurk has experienced drastic increases in trading volume from lira:

Source: Saxo Bank and Investing.com

When checking Google Trends for the search activity for “Bitcoin” in Turkey over the past month, a clear increase in search activity appears in the past week. And looking at the global search activity, Turkey is at the top:

Past 30 days search activity on "Bitcoin" on Google. (Left) Interest over time, with index 100 as max. (Right) Global top 5 interest by country. Source: Google trends.

Wide range of crypto regulations in the pipeline

The Turkish government has been monitoring the cryptocurrency space for some time. As a consequence of the recent events, Turkey’s central bank announced on April 16 that crypto payment solutions and partnerships will be banned, taking effect from April 30, mentioning “irreparable damage” and “transaction risks” as major factors. This drastic action by a government regarding crypto regulation seemed to have an effect the crypto market as Bitcoin dropped by 4 % after the announcement.

Last Friday, the Central Bank Governor Sahap Kavcioglu stated that in addition to the announced payments ban, Turkey’s Finance Ministry is working on a wide range of crypto regulations, and details are expected to be ready in two weeks time. He furthermore slightly lightened the atmosphere by announcing that a full ban of cryptocurrencies is not in the pipeline, as “You cannot fix anything by banning crypto and we do not intend to do this” (link).

The crypto regulations in Turkey are important to follow as Turkey is one of the first countries to announce significant restrictions on the usage of crypto currencies, and crypto traders seem to be looking to the events in Turkey.

Follow news on this and other important crypto events in our regular crypto updates here.

Disclaimer

Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000
Australia

Contact Saxo

Select region

Australia
Australia

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide and Product Disclosure Statement to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.
Please click here to view our full disclaimer.