THE RISE OF BITCOIN IN TURKEY AS A NEW INVESTMENT TOOL

Abstract

Cryptocurrencies are becoming increasingly popular among the investors. The surveys show that the investors in emerging markets are more inclined to invest in cryptocurrencies (Statista, 2022). Bitcoin has a market cap of around 50% of the total cryptocurrencies which led us to base our study on it. Turkish investors new to the financial markets are specifically interested in new initial public offering (IPO) and Bitcoin. The underlying drive for this new investor type is to have quick and high returns from their investments. In 2020 IPO’s provided high and fast returns but they were limited in terms of investment size. Bitcoin on the other hand is accessible for the average investor. This study analysed the position of Bitcoin as an investment tool in Turkey between 2014-2021 and tried to find out the interaction between the Bitcoin and the possible substitutive investment tools like BIST100 Index, USDTRY, Interest rate, and Gold. According to our findings, there is a trade-off between interest rate and Bitcoin in the long-run, but in the short-term there is causality between BIST100 and Bitcoin.