Increasing Crypto Investments
The Turkish crypto market has grown rapidly. Over half of the population now invests in crypto. Macroeconomic factors like high inflation and currency devaluation drive this surge. These factors have boosted the use of stablecoins.
Stablecoins Leading the Market
In 2024, USDT-TRY became the largest trading pair on Binance with over $22 billion. Turkish traders also invest in riskier assets. Meme tokens surpassed Bitcoin in trade volume this year.
Lira’s Rising Trade Volume
The Turkish Lira’s trade volume increased from millions to over $10 billion in four years. In 2024, it exceeded $10 billion monthly for eight consecutive months. The cumulative Lira volume in 2024 was about $95 billion. The Lira ranked fourth in trade volume, behind USD, KRW, and EUR. It closed the gap with the Euro, briefly surpassing it in total volume.
Factors Boosting Crypto Adoption
Turkey faces high inflation and currency devaluation. Inflation averaged over 40% in the past five years. The central bank cut rates until June 2023, worsening the Lira’s devaluation. The Lira lost over 300% of its value from 2020 to 2023.
Despite policy normalization, the Lira continued losing value in 2024. Bitcoin appreciated significantly since 2021, offering a store of value. The BTC-TRY pair surged over 800% since 2021.
Binance’s Market Dominance
Binance and BTCTurk dominate Turkish trading platforms. BTCTurk’s share fell from 95% in 2020 to 13% in July 2024. Other exchanges like Gate.io, KuCoin, and OKX struggled to gain traction. Binance’s dominance is due to deep liquidity and low fees. Binance offered zero fees for BTC-TRY trading between July 2022 and March 2023. Binance also introduced 61 new TRY trading pairs in 2024.
Traders Favor Stablecoins and Memecoins
Turkey’s inflation boosted stablecoin use. In 2024, USDT-TRY was the largest trading pair on Binance with over $22 billion. Meme tokens surpassed Bitcoin in trade volume. The share of BTC-USDT on BTCTurk rose from 20% in 2021 to over 50% by June 2024.
New Crypto Regulations
On July 2, Turkey approved new crypto regulations. The law aims to remove Turkey from the FATF “gray list.” It introduces licensing and compliance requirements for crypto service providers. Platforms must pay an annual fee of 2% of trading income. Local exchanges must comply by August 2. Global exchanges targeting Turkish customers are also affected. Binance announced it would halt marketing activities in Turkey and remove Turkish language support.
Conclusion
Crypto adoption in Turkey continues to grow, driven by high inflation and currency devaluation. Turkish traders invest in stablecoins and high-risk altcoins. The market’s growth has increased competition among exchanges. Binance remains the market leader. New regulations could reshape the market, bringing clarity and potential challenges.
Investor Strategy Based on Turkish Crypto Trends
Focus on Stablecoins
Invest in stablecoins like USDT. Turkish traders prefer stablecoins due to high inflation and currency devaluation. USDT-TRY is the largest trading pair on Binance.
Diversify with Memecoins
Allocate a portion to memecoins. These assets have surpassed Bitcoin in trade volume among Turkish traders. This indicates high speculative interest and potential for high returns.
Leverage Binance’s Dominance
Use Binance for trading. Binance has deep liquidity, low fees, and many TRY trading pairs. This dominance suggests better trading conditions and opportunities for profit.
Monitor Lira Trade Volume
Track the Turkish Lira’s trade volume. The Lira’s increasing trade volume reflects rising interest and potential opportunities in TRY-denominated pairs.
Anticipate Regulatory Changes
Stay informed about new regulations. Turkish crypto laws introduce licensing and compliance requirements. Adapt strategies to comply with these changes and mitigate potential risks.
Hedge Against Inflation
Invest in assets that hedge against inflation. BTC and stablecoins can protect against the Lira’s devaluation. BTC-TRY pair surged over 800% since 2021, showing strong potential as a store of value.
Explore Local Exchanges
Consider local exchanges like BTCTurk. Despite its reduced market share, it remains a significant player. Local exchanges might offer unique opportunities and advantages under new regulations.
Stay Agile and Informed
Stay updated with market trends and regulatory changes. The Turkish crypto market is dynamic, with evolving factors influencing investment strategies.
