- The taxation of cryptocurrency and NFT transactions is presently unregulated.
- By mid-December, the TRY/USD exchange rate had plummeted.
The lira’s volatility may be linked to the price of Bitcoin (BTC) and Ethereum (ETH), the two most popular cryptocurrencies, notwithstanding Turkey’s high inflation rate. By mid-December, the TRY/USD exchange rate had plummeted from 9 to 18.5 liras per dollar before rising to as much as 10 liras and then dropping back to 13.87 liras, making this currency a very volatile asset.
Turkey’s president, Recep Tayyip Erdogan, slashed interest rates against the advice of central bankers during a time of high inflation, which contributed to the lira’s instability. Cryptocurrencies have become more popular with investors, especially significant professional and institutional money managers like George Soros, who are looking to diversify their portfolios.
As a consequence of the cryptocurrency market’s unexpected drop in the first trading week of 2022, Bitcoin and Ether, which had both risen 100 percent and 300% in 2021, entered the bear market territory. Three things went wrong, and that’s what caused the plane to go down.
Crypto Market Fall
The minutes of the December meeting of the Federal Reserve in the United States were made public, the first event. According to them, the US central bank may begin hiking interest rates sooner than previously anticipated. The second event was the anti-government rioting in Kazakhstan, which led to the country’s leadership being ousted.
Internet services shut down, leaving an estimated 13% of the world’s Bitcoin mining operations without power. Topping it all off was a global pandemic of COVID-19’s Omicron form that sickened hundreds of thousands of people, putting a strain on healthcare systems that were already creaking under the weight of the prior outbreaks’ cumulative toll.
The use of cryptocurrencies by Turkish nationals has increased significantly in recent years. The taxation of cryptocurrency and NFT transactions is presently unregulated.