How did the Turkish crypto ecosystem survive 2020?

Turkey started off strong in crypto and blockchain in 2020 — then the pandemic happened.


Turkey’s crypto and blockchain ecosystem welcomed 2020 with big ambitions and a strong track record from 2019, which was its best year ever in terms of adoption. Following the release of Statista’s “Global Consumer Survey 2019,” which lists Turkey as a global leader by a wide margin in terms of crypto use, one major crypto exchange after another announced plans to set up shop in the country.

Huobi and Binance established their offices in Istanbul, Turkey’s biggest city and business center. Big players from Europe like Crypto.com and Bitpanda showed clear interest in the Turkish crypto ecosystem. The Turkish lira, the national currency of the country, became a regular trading pair on global exchanges.

The Turkish government and public sector took active steps toward blockchain adoption: After announcing plans for a national blockchain infrastructure, the government also detailed a roadmap for a national central bank digital currency. Turkey’s 2020 Annual Presidential Program set the end of 2020 as a deadline for the pilot tests of a national blockchain-based digital lira. Around the same time, the country’s financial watchdog Capital Markets Board of Turkey announced its plans to design a regulatory framework for crypto.

The Turkish crypto ecosystem was getting ready for a high-octane year at the beginning of 2020, but the pandemic happened, and many aspects of this multilayered progression had to hit the brakes hard.

Not so different from the rest of the world

It is hard to talk about the future of money, innovations or new trends if they are not going to provide immediate relief during this period where people are gathered in front of TV screens to get updates on matters of life and death. When the pandemic first hit, nobody in Turkey cared about crypto for a couple of months. Even the 2020 Bitcoin (BTC) halving, the first one since its previous all-time high in 2017, failed to get the attention of the masses.

People needed — and still need —efficient access to healthcare and medicine, clarity on the progress on vaccinations, and only after that, a safe haven to securely store their assets. Bitcoin can only provide the last one. Therefore, the conversations about crypto during the early period of the pandemic were limited.

Bitcoin all-time high against the Turkish lira

2020 was not a bright year for the Turkish economy. COVID-19 was certainly not the only factor affecting an already struggling country. But the pandemic-driven panic, uncertainty and tough calls from the government to cope with the outbreak resulted in a sharp fall for the Turkish lira against Bitcoin, the U.S. dollar and most other currencies in the global market. Johns Hopkins University professor Steve Hanke, who called lira “toast” on Twitter, claimed that “Turkey has run out of ammunition in its futile defense of the hopeless lira” and the only solution is a gold-backed currency.

Turkish crypto markets tell a slightly different story, though. People who stayed at home during prolonged periods were intrigued by digital assets that were easy to reach and trade, and more people started to give crypto a chance as a new asset. Thanks to Bitcoin halving, the recent boom in decentralized finance projects, and BTC price nearing $20,000 once again, Turkey-based crypto exchanges and global players that target Turkish users shared impressive numbers in the second half of the year. BtcTurk, a leading local crypto exchange, announced in August that over 1 million users were trading on the platform.

A big spike in trade volume was also revealed by another major exchange: In an interview with Cointelegraph Turkey, Paribu CEO Yasin Oral highlighted that during the recent bull run in the crypto markets, the platform saw exponential growth in daily trading volume, occasionally going over $200 million.

This volatile activity of the Turkish lira has attracted the attention of global markets during 2020. The lira-pegged stablecoin BiLira (TRYB) was listed on many global exchanges such as Bittrex and BTSE.

Top cryptocurrencies in Turkey

Turkey’s Information and Communication Technologies Authority published its “Cryptocurrency Research Report” in September. This survey has two important results:

First, the five most heavily invested cryptocurrencies in Turkey are Bitcoin, XRP, DigiByte (DGB), Bitcoin Cash (BCH), and Stellar Lumen (XLM), respectively. That leaves regulars from the global charts such as Ether (ETH) and Litecoin (LTC) out of the top five.

Second, the report claims that the number of crypto owners in Turkey is 2.4 million, or around 3% of the population. These numbers conflict with Statista’s previous report, which claims that 20% of 80 million people living in Turkey has “crypto exposure.” Moreover, another survey titled “Cryptocurrency Awareness and Perception Survey” claims that crypto use among Turkish people is actually less than 1%. Those two reports hang a big red question mark over Turkey’s global leadership in crypto adoption, which was the talk of 2019.

Football is a gateway to crypto for Turkey

No yearly roundup involving Turkey would be complete without a nod to football, the most popular sport in the country, which is also rooted deep in its culture. In 2020, football and crypto came closer than ever thanks to a number of partnerships and fan tokens.

BtcTurk became a major sponsor of both the women’s and men’s Turkish national football teams on the road to next year’s UEFA European Championship. This sponsorship has provided crypto in general, BtcTurk and BTC itself with potentially high exposure during international football matches.

Chiliz, a sports- and entertainment-focused fintech firm, introduced a number of major Turkish football teams to its blockchain-based fan token platform, Socios. Football clubs Galatasaray and Trabzonspor have already launched fan tokens, enabling a new way for fans to support their favorite teams, while Istanbul Basaksehir has announced plans to launch on Socios before the end of 2020. Several reports highlight that other major clubs like Besiktas and Fenerbahce are going to follow suit in 2021.

In order to reach more local users, Socios has also partnered with Paribu to list fan tokens. The first project listed on the local trading platform, Galatasaray Fan Token, saw more than $2 million in volume in less than 24 hours, proving there is strong interest in fan tokens from Turkish users. Paribu CEO Oral noted that there is a significant user base “that gets to know Galatasaray Fan Token before they become aware of Bitcoin or any other crypto.”

What to expect from 2021?

Turkey is closing 2020 without a blockchain-based national currency or a clear regulation on crypto. But that doesn’t mean the government is on a hiatus altogether. Regulatory forces are very active in the Anti-Money Laundering aspect of crypto, and local trading platforms confirm that they are constantly in touch with authorities about any suspicious activities.

They are expecting a welcoming regulatory framework to support the growth of Turkey as a regional hub for crypto and blockchain projects in 2021 and beyond. No matter what, Cointelegraph will continue to cover more stories from Turkey as the only global crypto media platform with a dedicated team in the country.