On Tuesday, the bitcoin price escalated by 7% over just one week. This quick upturn is attributed to the growing concerns that Greece could exit the EU, what urged speculators to actively invest in the digital currency.
By June 30, Greece has to repay €1.6 billion ($1.8 billion) debt to the International Monetary Fund, although there are concerns the country will not be able to return the funds. Moreover, it has to repay larger debts to the European Central Bank in July and August.
Although the government in Athens has already called on public sector bodies to provide any cash reserves they have, the country is unlikely to be able to return the debts.
Instead of keeping their money in national banks, the citizens of Greece prefer to invest in private assets, such as cryptocurrency or precious metals like gold. People in the country no longer trust the authorities. Furthermore, it is unknown whether the currency would be utilized if Greece would leave Eurozone.
“Some people aren’t waiting for the government to figure out an exit plan and are doing it for themselves,” Joshua Scigala, co-founder of an online bitcoin exchange Vaultoro, told Reuters.
“You have people worrying about their family’s wealth or their life savings, and worrying that their money might be locked up in banks… they’d rather hold money in a private asset like gold or bitcoin,” he added.
Over the last two months, the company recorded the growth of deposits from customers with Greek IP addresses.
Despite the high volatility in the bitcoin market, the price of the cryptocurrency has become more stable during the last few months. Main financial organizations and governments recognize the potential of the digital currency.
When back in 2013 Cypriots started withdrawing their deposits from banks, the value of bitcoin increased by around 700% in about a month.
Paul Gordon, a board member of the UK Digital Currency Association and a founder of bitcoin startup Quantave, believes this time the growth is likely to be more significant, taking into account the increased people awareness of bitcoin.
“This time round, the worries about Greece could be filtering through. (Bitcoin) could provide an alternative outlet for some people who are concerned about capital controls, along with more traditional methods,” he told Reuters.
Bitcoin reached $252.05 on the Bitstamp exchange on Tuesday, its highest value since April, before falling a little to $245.21.
Meantime, some suggested to introduce a bitcoin-like virtual currency parallel to the euro in Greece in order to avoid exit from the Eurozone.