Sustainably Investing in Digital Assets Globally

Chapter 33Turkey

Turkey—the cradle of civilization—is quietly digitizing despite its high‐inflation economy, and the lira's volatility might be correlated with the prices of Bitcoin (BTC) and Ether (ETH). During the fourth quarter of 2021, the TRY/USD exchange rate crashed from 9 to 18.5 liras per dollar in the six weeks leading up to mid‐December before strengthening to as high as 10 liras and then falling back to 13.87 liras at the time of this writing, rendering the currency a highly volatile asset.

The lira's volatility stemmed from a contrarian interest rate cut made by Turkish President Recep Tayyip Erdoğan amid high inflation and against the advice of central bankers. High inflation tends to devalue cash and drive investors—including major professional and institutional investors as well as top hedge fund managers like George Soros—to invest their money in cryptocurrencies.¹

Blockchain Adoption: While Satoshi Nakamoto is credited with designing the first cryptocurrency, it was actually Turkish‐American Emin Gün Sirer—CEO of Ava Labs, professor at Cornell University, and codirector of the Initiative for Cryptocurrencies and Smart Contracts—who designed the first in 2003, six years before the launch of Bitcoin. Named Karma, it was based on a proof‐of‐work protocol.

Since 2019, Sirer has been focused on building Avalanche, an eco‐friendly blockchain that uses a novel consensus mechanism for high‐transaction throughput. As Sirer explained: “Avalanche is a high‐performance, ...