Turkey leads countries in the Middle East in the trading of Bitcoin, partly due to volatility in the Turkish lira, according to a sector report published this week.
The country accounts for the highest transaction volume in the region and ranks 29th globally in the adoption of cryptocurrencies, according to the 2020 Geography of Cryptocurrency Report published by Chainalysis. Iran and Egypt follow, ranking 52nd and 64th respectively, it said.
“The lira has been extremely volatile in recent years, prompting some to shift portions of their savings to cryptocurrency,” said Chainalysis, a blockchain analysis company.
The most common trade by far on BtcTurk, a leading Turkish platform, was selling the Turkish lira for Bitcoin, followed by several pairs of lira and other cryptocurrencies, it said.
Turkey’s lira has slumped to successive record lows since a currency crisis struck in the summer of 2018. It dropped to a new all-time low of 7.66 per dollar on Tuesday, taking losses this year to 22 percent. The slump came even as the central bank spent tens of billions of dollars of its foreign exchange reserves this year to defend the currency’s value.
Turkey is also an exception when it comes to grassroots adoption of Bitcoin, which remains low in other regional countries, Chainalysis said.
Local Turkish exchanges PARiBU and BtcTurk are significantly active in the region, accounting for 4th and 6th respectively by volume, with nearly all of it coming from Turkish users, according to Chainalysis.
Turkey has no cryptocurrency regulations, but that appears set to change, Chainalysis said. The country’s capital market regulator aims to eventually enact regulations after it started to observe and report on the cryptocurrency market in January, it said.
The country also has the highest pre-existing adoption of mobile fintech and payments platforms in the Middle East, Chainalysis said. It cited a report from Dutch bank ING showing that 56 percent of Turks had used such platforms versus 33 percent of Europeans. That likely made the transition to cryptocurrency more natural for Turkish consumers, it said.