A couple of surprises to come out of Meltem Demirors’ Twitter account in the last few hours. Firstly, that the CoinShares Chief Strategy Officer and Blockchain Council member speaks Turkish (who knew?). And secondly, that the Turks own more cryptocurrency than any other European nation. (If you consider Turkey a European nation, of course).
From what the author could gather from Google Translate, Demirors declares that she is proud to be Turkish, based on the ING findings that 18% of Turks own cryptocurrency. This is much higher than the overall 9% average.
She also pays tribute to the great success of startups and investors in the country. However, there may be a few more reasons why Turkish people are holding onto digital assets.
For one thing, bitcoin may be volatile, but so is the country’s currency, the lira. In fact, even as bitcoin racked up record losses last November, trading volume on Turkish exchanges shot up by 37 percent.
The Turkish lira crisis involving dollar-denominated debt that took place last summer greatly devalued many Turkish families’ life savings. They also saw their pensions and investments significantly affected.
We may not be talking about the likes of Venezuela, but the lira did lose 20% of its value from one day to the next on August 10. Erdogan’s Turkey may be creating the perfect storm for cryptocurrencies.
With a dwindling economy and devalued national currency, it’s hardly surprising that Turkey takes the lead in cryptocurrency ownership. In fact, the anonymous co-owner of Bitcoin.org tweeted about the huge surge in traffic from Turkish investors in August, saying this is how Bitcoin takes over the world:
There’s been a MASSIVE 42% increase in visitors to https://t.co/OsFgRFRRZb from Istanbul as the Turkish Lira plummets. This is how Bitcoin takes over the world, not through ETF’s and “HODL”, but through replacing fiat currencies as they fall apart!
— Cøbra (@CobraBitcoin) August 13, 2018
Besides the crumbling economy and fluctuating lira, according to computer science professor at Cornell University Emin Gün Sirer, culture plays a large role in the Turkish appetite for bitcoin.
Not only does the country have a much younger population than the rest of Europe, but they are particularly open to new technology. Moreover, he says that financial schemes with high-profit margins are naturally attractive to Turks. This means the Turks own more cryptocurrency not only as a means of payment but also as a speculative asset.
As for Erdogan, he has not made cryptocurrency illegal in the country. However, he has tried to persuade citizens to convert their dollars into lira, rather than bitcoin. The state religious authority Diyanet also decreed that Muslims should not trade in cryptos.
When Turcoin turned out to be a Ponzi scheme, this gave more fodder for both their arguments. But while the Turkish people are not oblivious to cryptocurrency scams, neither are they blind to the erratic behavior of their government, nor the volatility of their national currency.
So, while Demirors may be right about cryptocurrency startups, it seems there are plenty of other factors steering the Turks towards investing in bitcoin.
Will Turkey become a hotbed for cryptocurrency adoption? Share your thoughts below!
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