Crazy demand for cryptocurrencies in light of economic turmoil

The Istanbul derby between Besiktas and its arch-rival Fenerbahce witnessed a strange incident of its kind, as the referee of the match used one of the commemorative bitcoins in the draw for the beginning of the match, which surprised many fans of the round witch in Turkey.

As a result, the Turkish Football Association announced the opening of an investigation.

Apart from the state of controversy raised by the incident, it indicates the expansion of the use of cryptocurrencies in Turkey, which has become a large number of users of crypto and digital currencies at the international level.

This is evidenced by the spread of advertisements both on TV screens and even on the streets promoting cryptocurrency exchanges, promising users to reap huge profits.

The lira is falling

The popularity of cryptocurrency assets in Turkey came amid an almost daily decline in the price of the local currency, the lira, as Turks seek ways to protect their savings from the devaluation of the lira.

It is worth noting that the Turkish lira has lost half of its value during the past year, while the inflation rate has reached 70%, which is the highest level in 20 years.

In it, Turkish financial expert Vedat Guven said that the volume of trading in the cryptocurrency market “has increased with the increase in demand.”

In an interview with DW, Goffin – who co-authored a book on cryptocurrency – added that Turks are looking to “protect their money from high inflation and high interest rates.”

It is noteworthy that previous generations of Turks resorted to investing in more stable assets such as gold and real estate in order to avoid the risks of inflation, but it seems that the current generations have seen cryptocurrencies as the best alternative.

In this context, Güven said, “Between 5.5 and 6 million Turks now own cryptocurrency accounts in the country. It is due to the get-rich-quick mentality that doesn’t require a great deal of learning or more effort.”

This coincided with the failure of the Turkish government – at least so far – to stop the lira’s slide, despite it taking a number of decisions on an almost daily basis in order to restrict access to foreign exchange.

In it, Burcak Unsal, a lawyer at a legal office specializing in cryptocurrency in Istanbul, said that “confidence in the Turkish lira has decreased despite all the government’s efforts, in addition to the fact that investing in real estate, foreign currencies, etc. has become expensive and unreliable in addition to that it includes The need to pay taxes and fees.

Onsal added that cryptocurrencies are the opposite. “Students and pensioners can invest in digital currencies with very modest amounts, here they can invest even if they do not have a credit card.”

Is it too late?

However, experts warned of the dangers of investing in the cryptocurrency field, especially after the founder and CEO of the cryptocurrency platform Thodex fled to Albania with two billion dollars in investor money last year; Which shook the throne of cryptocurrency in Turkey.

The Turkish Central Bank banned the use of cryptocurrency and crypto-assets in the purchase of goods and services last year, while the issue of taxation of cryptocurrency trading is a critical issue.

The sudden ban on the use of crypto assets has raised many questions about the steps that the Turkish authorities may take regarding cryptocurrencies.

In this regard, Unsal said, “There has not been enough legislation on this issue in Turkey so far, and here is the problem that Turkey has been long overdue, so a reliable sector must be established without any delay in accordance with accurate and comprehensive legislation.”

In turn, cryptocurrency specialist Vedat Guvin said, “The ban on making payments using cryptocurrency leads to the ban on blockchain projects, which promises the wrong work and this means that we ourselves are putting obstacles in our way.”

The “Blockchain” is called the Blockchain, which is a series of accounting chains or what is called a digital “general ledger” that is available to the public and includes transactions that occur through the computing systems of the block chain. On the Public Ledger, all cryptocurrency transactions including payments and transfers are recorded and can be monitored by anyone.

Each block of the block chain has a property called “nonce”, which means that the number is used once in addition to the “hash” or information encryption process. Bitcoin users, euphemistically called “cryptocurrency miners,” rely on special software to solve the incredibly mathematical puzzle of finding an asymmetric number, or “nons,” that can be used once to produce a “hash.”

Cryptocurrency exchange boom

Returning to talking about the growth of cryptocurrency trading in Turkey, platforms reported that the daily trading volume of BtcTurk cryptocurrency platform, which is the first in the country, amounted to about $424.3 million in the second week of May, while in another platform called Paribu, the trading volume reached $203.5 million.

It is estimated that there are many cryptocurrency exchanges operating in Turkey which prompted Unsal to say that “cryptocurrency exchanges are proliferating in Turkey like mushrooms as foreign exchanges have entered the Turkish market.” “The scale of the matter spread and the amount of direct investment that is being pumped, is unbelievable,” he added.

It is worth noting that the value of Bitcoin increased by 150 percent last year, reaching a record level of nearly 69,000 dollars, but the prices of all cryptocurrencies witnessed in recent days a sharp decline after losing more than half of their value at the end of 2021.

The US CoinMarketCap website, which specializes in following developments in the cryptocurrency market, had stated in early May that cryptocurrencies lost about $800 billion of their market value within one month.

Seda Caesar Bellin / M.A

 

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