BY DR SOHA MAAD
Introduction
Turkey is ranking high in crypto adoption. Crypto industry in Turkey is growing driven by continued innovation better infrastructure, more use cases, and a diverse ecosystem of distributed applications DApps. Institutional participants in Turkey are increasingly recognizing the potential and opportunities of digital assets from investing in crypto to leveraging blockchain technology for their operations and institutions.
This article overviews the major factors affecting crypto adoption in Turkey, the growth of crypto industry in Turkey and best practices to share with other countries. The article also highlights challenges and opportunities for the crypto industry in Turkey.
Turkey evolving crypto landscape
Binance Research report exploring Turkey’s evolving crypto landscape highlighted the following key findings:
- Turkey has one of the highest cryptocurrency adoption rates in the world, with crypto being one of its most popular asset classes to invest in. Turkish users also have a positive outlook on crypto in the near and long term.
- Often hailed as a crossroads where history meets innovation, Turkey stands as one of the top adopters of digital assets in the world. The country’s emerging status as a crypto hub speaks to its fierce appetite for Web3 innovation. In Turkey, the financial world is increasingly embracing the future of blockchain technology.
Crypto Adoption in Turkey
Turkey has one of the highest crypto adoption rates in the world. According to data from HedgewithCrypto, adoption rates in the country have more than doubled in the past three years, increasing from 16% to 40% of the population. It is estimated that two in every five citizens hold crypto. Based on data from Chainalysis, Turkey is also the fourth-largest crypto market by estimated transaction volume globally, ahead of other major economies.
Top reasons for investing in crypto in Turkey
Binance survey about the motivations behind investing in crypto in Turkey indicated that the potential for profits was the most compelling reason. Operational factors related to the ease and accessibility of investing also stood out as major motivators. This highlights the perceived benefits of this innovative asset class.
Challenges facing investment in Crypto in Turkey
Binance survey about factors against investing in crypto in Turkey reveals that risk was the main concern. The perception that cryptocurrencies are risky continues to be the main hurdle for adoption. The second and third most common areas of concern, namely insufficient knowledge and a lack of safety, also play a role in this perception.
Revenue in the Cryptocurrencies market in Turkey
According to Statista Market Insights, revenue in the Cryptocurrencies market in Turkey is projected to reach US$139.2m in 2024. Revenue is expected to show an annual growth rate (compound annual growth rate (CAGR) 2024-2028) of 10.44% resulting in a projected total amount of US$207.1m by 2028. The average revenue per user in the Cryptocurrencies market in Turkey amounts to US$10.7 in 2024.
Global data shows that the highest revenue is reached in the United States (US$23,220.00m in 2024). In the Cryptocurrencies market in Turkey, the number of users is expected to amount to 15.25m users by 2028. User penetration will be 15.01% in 2024 and is expected to hit 17.30% by 2028.
Crypto adoption and Inflation in Turkey
According to KuCoin, as inflation is rising in Turkey, crypto adoption is also rising in Turkey. Over the last year and a half, crypto adoption in Turkey has increased from 40 percent to 52 percent of the Turkish population.
The growing number and percentage of crypto investors in Turkey indicate an increasing interest and acceptance of crypto as a hedge against inflation, especially with the Turkish lira losing over 50% of its value against the United States US dollar
According to KuCoin survey, 58 percent of respondents said that their primary reason for investing in cryptocurrency is to accumulate wealth over the long term, while 37 percent aim to use it as a store of value. Regarding which cryptocurrencies people are investing in, Bitcoin leads the pack: 71 percent of investors said they own Bitcoin, while 45 percent own Ethereum and other stablecoins.
Although men still are more likely to invest in crypto, young women in Turkey are increasingly investing in crypto. In Turkey, 47 percent of crypto investors between the ages 18 and 30 are female.
central bank digital currency (CBDC) in turkey
The Turkish government has been experimenting with a central bank digital currency (CBDC) called the Digital Lira. A deep and comprehensive understanding of the crypto community is crucial in designing a more encompassing and accountable financial ecosystem in Turkey. As the crypto environment keeps gathering pace, understanding crypto users’ actions, inclinations, and driving forces across various regions are becoming increasingly essential in developing a central bank digital currency (CBDC) for Turkey.
Outlook of Crypto Industry in Turkey
A majority of Turkish investors are optimistic about the outlook of the crypto industry in the country. Many investors in Turkey believe that crypto prices will increase in the future. Moreover, the number of crypto investors is expected to grow in the next five years, thus raising further the level of crypto adoption in Turkey and raising as well the use of crypto currency as a hedge against inflation. Turkey will continue in its endeavour to launch the Central Bank Digital Currency Digital Lira