Crypto interest in Turkey is high, despite new regulations Crypto interest in Turkey is high, despite new regulations Crypto interest in Turkey is high, despite new regulations

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

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research 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. To the extent that any content is construed as investment research, you must note and accept that the 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 under relevant laws.

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

Saxo Markets
40 Bank Street, 26th floor
E14 5DA
London
United Kingdom

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo Markets is a registered Trading Name of Saxo Capital Markets UK Ltd (‘SCML’). SCML is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871. Registered in England & Wales.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo Markets assumes no liability for any loss sustained from trading in accordance with a recommendation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc.

©   since 1992