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The effect of the elections on the markets was also felt in the cryptocurrency ecosystem. While experts predict that the recent recovery in Borsa Istanbul and the developments in foreign exchange may lead crypto investors to the stock market, it was noted that cryptocurrencies will maintain their priority in the second half of the year.

TURKEY — Cryptocurrency markets continued to be affected by global developments and local agendas around the world in May. The presidential elections, stock market and foreign exchange volatility related to the elections, and discussions about the new cabinet were the main local developments. Meanwhile, on the global front, Hong Kong's new decision on cryptocurrencies and the debt ceiling crisis in the US marked the markets. Sevcan Dedeoğlu, Research Director of Gate TR, a cryptocurrency platform where more than 1,400 cryptocurrencies can be bought and sold, operating under the motto "open the door to crypto", evaluated the developments in the cryptocurrency markets in May.

Borsa İstanbul, the competitor of cryptocurrencies

Following the second round of the Presidential Elections on May 28, the Istanbul Stock Exchange (BIST) started the week with a rise. Sevcan Dedeoğlu, noting that BIST, which has gained nearly 4% in value since the beginning of the week, is the only competitor against cryptocurrencies, said, "The rising stock indexes with the end of election uncertainty may cause investors to turn to the stock market. We anticipate a sideways recovery trend in the cryptocurrency market until the end of the year. In this case, BIST, which follows an uptrend, may attract the interest of investors. We know that the general investor base in the cryptocurrency market closely follows the Istanbul Stock Exchange and is interested in IPOs. During the bear market of cryptocurrencies, the number of investors in the Istanbul Stock Exchange exceeded 4 million, breaking a record.”

On the other hand, Sevcan Dedeoğlu, Research Director of Gate TR, stating that having higher expectations than the current value of the USD/TRY pair due to reasons such as the trade deficit and the budget deficit, and that lower returns than this expectation would not convince investors, said, "Due to high volatility, the cryptocurrency market will continue to be the choice of Turkish investors. In line with the expected gradual recovery in 2023 and rising expectations for 2024, Turkey will be one of the countries that stimulate the cryptocurrency market during the bull market period.”

Crypto money move from Hong Kong by gate.io

Sevcan Dedeoğlu, who reminded that China banned all crypto transactions and crypto mining in 2021, said, “Despite this, as of June 1, 2023, crypto transactions of individual and medium-scale corporate companies in Hong Kong under Chinese sovereignty will become legal. At the same time, a new licensing regulation for platforms offering digital asset trading services will be implemented. This situation brought along discussions about whether China will re-enter the cryptocurrency markets. With the fund inflow from Asian markets, it is possible to expect a positive course in leading cryptocurrencies such as Bitcoin, Ethereum, and Litecoin. Gate.io's Hong Kong branch also applied for a license and opened cryptocurrencies like BTC, ETH, and LTC for transactions.”

Debt ceiling crisis in the US is closely related to cryptocurrencies

Sevcan Dedeoğlu, Research Director of Gate TR, stated that another significant development affecting the cryptocurrency markets came from the USA. She concluded her evaluations as follows: “Although there is a debt ceiling crisis in the USA every year, the risk of default this year is slightly higher and the market is pricing according to this expectation. In a research conducted by Bloomberg, investors noted that in case the US economy defaults, they would first turn to gold, then US bonds, and Bitcoin in the third place. In this respect, Bitcoin was considered among the safe havens in the eyes of investors. While June 1 and June 5 emerge as two critical dates related to the solution of this crisis, expectations that an agreement will be reached by the weekend have driven Bitcoin above $28,000, its highest level in two weeks, and Ethereum above $1,900. The solution of the crisis will bring an increase in risk appetite and this will be a positive development for the markets. If an agreement is not reached, the markets may expect a sharp correction followed by Bitcoin's positive divergence.