Bitcoin returns to the debate as the lira falls again
One dollar was worth approximately 48.77 Turkish lira on September 18, a new 2026 high for USD/TRY and therefore a new low for the Turkish currency. At the beginning of January, the dollar was still trading at around 42.97 lira. In less than nine months, the currency has therefore continued to lose ground against the greenback.
This depreciation comes as Bitcoin itself has just reclaimed the $80,000 area, as global investors once again question inflation, interest rates and the strength of currencies. For a Turkish saver, the comparison is not limited to BTC versus the dollar. It is between Bitcoin and a local currency whose purchasing power continues to erode.
Official Turkish inflation still stood at 31.51% year-on-year in August, according to the national statistics institute TÜİK. Food prices rose by 33.79%, transport by 35.08% and housing, energy and fuel by 39.77%. In August alone, prices increased by a further 1.84%.
At the same time, the central bank is keeping its policy rate at 37%, with an overnight lending rate of 40%. It believes that underlying inflation is slowing, but acknowledges that high energy prices remain a risk.
A depreciating currency. Rates at 37%. Inflation above 31%. This is already an environment in which seeking alternative assets becomes fairly rational, even without considering the fund crisis.
Istanbul’s stock market has just lost 8.18% in one week
The second shock hit the equity market.
Between September 14 and 18, the BIST 100 fell 8.18%, ending the week at around 13,284 points. Some stocks suffered far sharper losses: several fell by more than 40% in just five sessions.
This move is not simply the result of broad macroeconomic concerns. Part of the pressure is linked to difficulties faced by several fund managers holding significant positions in companies with limited liquidity.
The mechanism is fairly familiar when it breaks down. Funds buy large amounts of certain shares, even though relatively few are actually circulating on the market. Demand pushes the price higher. The rise increases the fund’s net asset value. Spectacular performance attracts new investors, bringing in even more capital to invest.
Then the cycle reverses.
Investors ask to withdraw their money. The manager must sell assets to repay them. When positions are illiquid, selling large amounts immediately pushes their price down. The fall in net asset value triggers further withdrawal requests, which require even more sales.
The Financial Times describes this dynamic precisely as a “fund run,” the equivalent of a rush for the exit applied to investment funds. The newspaper reports that approximately $1 billion was reportedly withdrawn from Turkish funds in a single day at the height of the tensions.
This is no longer merely a decline in a stock.
The liquidity of the vehicle itself becomes the problem.
131 funds and approximately 353,000 investors affected
The regulator’s response has been particularly far-reaching.
Turkey’s Capital Markets Board suspended subscriptions and redemptions for funds linked to seven asset management companies: Tera, Pusula, Hedef, Atlas, A1 Capital, Pardus and Bulls. The authorities then began the liquidation process for 131 funds associated with these firms.
The total value of the portfolios involved is around 890 billion to 891 billion Turkish lira. At the lira’s current exchange rate, this represents approximately $18.3 billion. Reuters also cited approximately 353,000 affected investors.
İş Bankası was appointed to manage the liquidation of Tera’s funds, while state-owned Ziraat Bankası is handling the funds linked to the other six managers. The process is intended to gradually convert the assets into cash so that investors can be repaid in proportion to their holdings. Payments may be made progressively, and the liquidation should theoretically last up to three months, with the possibility of an extension.
However, one important shortcut should be avoided: $18.3 billion has not disappeared.
This is the value of the assets held in the funds that must be liquidated, not an $18.3 billion loss. A significant portion of this value may be recovered as the positions are sold.
The problem lies precisely in the conditions of those sales. If a fund must quickly dispose of a large quantity of illiquid shares, it may receive far less than the last reported value of its portfolio. This gap between theoretical value and the price actually available is what turns a redemption crisis into a liquidity crisis.
The authorities now want to prevent this mechanism from spreading to the rest of the market.
Ankara injects liquidity and reduces margin requirements
The response was swift.
The Turkish central bank increased its repo funding to 300 billion lira and sharply raised banks’ borrowing limits in the interbank market. Reuters reports that these limits were increased tenfold to ensure sufficient lira liquidity in the system.
The market regulator took another unusual decision: the minimum capital ratio required for certain margin transactions was temporarily reduced from 35% to 20% until October 2. The aim is to reduce the likelihood that margin calls will force further selling in an already pressured market.
In other words, the authorities are trying to interrupt a particularly dangerous feedback loop.
Prices fall. The value of collateral declines. Investors must provide additional collateral. Those unable to do so are forced to sell. These sales push prices down further and trigger new margin calls.
Temporarily reducing the requirement from 35% to 20% gives existing positions more breathing room.
It does not solve the fundamental problem of overvalued or illiquid assets. It mainly buys time.
The official response also contrasts with some highly alarmist claims circulating on social media. Turkey’s Financial Stability Committee says there is “no fundamental or structural risk” to the general functioning of Borsa İstanbul and that the difficulties are concentrated in a limited segment of the fund market. The ministry considers them temporary and manageable.
This position should be reported.
It does not change the fact that the intervention is significant. When a central bank injects additional liquidity, the regulator changes margin rules and 131 funds are placed into liquidation simultaneously, the problem is clearly not insignificant.
Bonds add another source of pressure
The bond market also provides an indication of the current stress.
The yield on Turkish 10-year government bonds was around 32.24% on September 15. It then jumped to approximately 35.27% on September 18, more than three percentage points higher in just a few sessions, according to the historical data available.
A rise in yields means a fall in the price of bonds already in circulation.
It also indicates that investors are demanding more to lend money over the long term in Turkish lira.
With inflation above 31%, this level is not irrational. But the combination remains difficult for the economy. Companies must finance themselves at high costs. The government faces significant yields. Stocks must compete with bond investments capable of offering spectacular nominal rates.
The problem is that Turkish investors do not think only in terms of nominal returns.
A bond may return 30% in lira.
If the currency simultaneously loses a significant part of its value against the dollar, the result in international currency is far less impressive.
It is precisely this contradiction that has driven Turkish demand for dollars, gold and crypto assets for several years.
Bref Crypto regularly explains how inflation and bond yields alter the investment trade-off around Bitcoin. The Turkish case simply takes this logic much further: domestic nominal yields are extremely high because inflation and currency risk are also extremely high.
A scarce asset denominated independently of the lira then becomes naturally appealing.
That still does not mean it is risk-free.
Turkey is already one of the world’s major crypto markets
The use of crypto assets in Turkey did not begin this week.
Chainalysis ranked the country 14th globally for crypto adoption in 2025. The firm estimates that gross inflows into digital assets since 2021 reached approximately $878 billion by mid-2025, in an environment marked by several episodes of lira depreciation and high inflation.
The IMF goes even further in its report published in early 2026. The institution estimates that between one-quarter and one-half of Turkish households now hold some form of crypto asset, while highlighting the risks this creates for capital-flow controls and financial stability.
But here too, a common idea needs to be corrected: Turks are not turning only to Bitcoin.
Stablecoins play a huge role.
Chainalysis had already observed that Turkey was one of the markets where stablecoins represented the largest share of purchases made with the local currency. During certain periods, stablecoin purchases in lira approached $6 billion per month. Usage rose in parallel with inflation.
This is logical enough.
Someone simply seeking to escape the depreciation of the lira may prefer USDT or USDC, whose volatility is much lower than Bitcoin’s.
Someone buying BTC takes an additional bet: the asset’s scarcity may protect purchasing power over the long term, but its price may also fall 30% or 50% in dollar terms before recovering.
The Turkish crisis therefore does not automatically demonstrate that Bitcoin is “the solution.”
It demonstrates something simpler: when confidence in the local currency erodes over time, people look for ways out.
“That’s why I own Bitcoin”: the argument works, with one limitation
The reasoning behind the post is easy to understand.
The lira is reaching new lows.
Inflation remains above 30%.
Stocks have just lost more than 8% in one week.
Bond yields exceed 35%.
Some investment funds are facing mass redemptions, and 131 vehicles must now be liquidated.
Against this accumulation of pressures, Bitcoin offers a characteristic that the Turkish system cannot change: its maximum supply remains capped at 21 million BTC.
The Turkish central bank can increase or reduce liquidity in lira.
The regulator can temporarily change margin requirements.
Managers can close funds.
None of these actors can create a twenty-one-millionth-plus-one bitcoin.
That is the monetary strength of the argument.
But Bitcoin is not insurance against every financial crisis. It was trading at around $80,000 on September 20, after falling close to $58,000 a few months earlier. A Turkish investor who converted all of their savings into BTC at the wrong time could have protected their wealth against the lira while simultaneously suffering a heavy loss in dollar terms.
That is why the Turkish example should not be reduced to “traditional finance is collapsing, therefore Bitcoin is rising.”
Rather, it shows why unstable monetary systems create structural demand for assets outside the national currency.
Dollar.
Gold.
Stablecoins.
Bitcoin.
Turks already use all four.
The fund crisis now adds another layer to the problem, because this time it affects a vehicle that many savers were using precisely to try to protect their money from inflation.
If the authorities manage to contain the difficulties within the 131 funds involved, the episode will remain a severe but localized crisis.
If withdrawals spread, forced selling resumes and the lira accelerates its decline, the question will become much broader.
In either case, Bitcoin does not need Turkey to collapse to demonstrate its usefulness.
It only needs enough people to prefer holding an asset whose supply no one in Ankara can alter.
