With the shallow volatility period in the cryptocurrency markets, investors have turned to stock exchanges more. This is a phenomenon observed globally and considered normal. However, the situation in Turkey is quite different. The Chairman of the Capital Markets Board (SPK) felt the need to warn investors.
Cryptocurrencies and Traditional Stock Exchange
Cryptocurrency investors, motivated by the lack of volatility in Turkey and the completion of elections, flocked to BIST. The number of investors rapidly increased, and initial public offerings played a significant role in attracting new investors to the stock market.
However, there is a problem. The group of investors transitioning from the cryptocurrency markets (estimated to be over 5 million investors in Turkey) to the stock market is much more interested in volatility. These investors, who have a high motivation for easy and quick profits, have a psychology that can trigger significant fluctuations in the stock market.
Indeed, we recently discussed the risks of the investor profile transitioning from cryptocurrency to traditional stock exchanges. Subsequently, we witnessed movements in many initial public offerings and already traded stocks that support these narratives.
Warning to Investors from the Chairman of SPK
SPK Chairman İbrahim Ömer Gönül warned the more than 8 million investors in BIST. The chairman, speaking at the Turkey Capital Markets Congress, drew attention to the “phenomenon” and paid group trap. The same warning applies to cryptocurrencies, and investors in every field should take these warnings into consideration.
“Investors should be cautious about membership-based groups and chat rooms created on social media platforms and should stay away from them. They should not trust those who want to benefit from tips and rumors.”
Investors directed through paid groups act with high profit expectations. Generally, those who direct these masses are also malicious, making them victims of “anonymous experts(!)”. The same applies to cryptocurrencies.
“Savers should make medium and long-term investments, examine companies’ financial statements, seek professional support if necessary. Especially in initial public offerings, they should thoroughly examine the prospectuses approved by our institution, evaluate the company’s value, scrutinize their financial statements, and make decisions accordingly.”
The Chairman’s warning became meaningful after the abnormal valuations of companies and the excessive increase in stock prices.
Stock market investors need to be cautious about sudden fluctuations caused by investors who have never traded in the stock market before but entered the market to profit from initial public offerings prompted by cryptocurrencies.
