By
Bhushan Akolkar
April 19th, 2024
After long negotiations Greece and the EU have finally reached an agreement which at once caused the massive tumble of bitcoin.
17 hours of negotiations are over and agreement in the Greek question has finally been reached. “The agreement was laborious, but it has been concluded. There is no Grexit”, – said European Commission President Jean-Claude Juncker. The announcement on Twitter caused a massive bitcoin sell-off – the price dropped from $317 to $284 by now, according to the CoinSpeaker Price Index (beta).
The parties have come a long way towards mutual understanding. Stumbling point remained the same all the time – Europe demanded Greece to implement austerity policy while the latter persistently asked for prolongation of repayment terms.
The talks seemed to turn from constructive discussion into struggle between strong and weak economies. German Chancellor Angela Merkel was in mood of firm measures which engendered discontent of some EU officials. She offered Greece alternative: either it accepts the conditions or take a “time-out” from euro zone.
Merkel appears to have a right to set terms as Germany is the largest creditor for Greece. She mentioned in the interview: “The most important currency has been lost and that is trust. That means there will be tough discussions and no agreement at any price”. But French President Francois Hollande rejected the idea saying that this tough measure will only lead to disunion of Europe.
Euro zone worked out the package of six large-scale measures to be implemented in Greece by Wednesday night. The measures included tax and pension reforms. A draft decision of EU financial ministers was sent to Greece. In case of its agreement German parliament planned to conduct a meeting on Thursday discussing a new loan. A new round of negotiations with Greece was to be launched approximately on Friday.
Most Greeks remained unsatisfied by high-pressure discussions with EU. Euclid Tsakalotos, Greece’s new finance minister, although silent in public was furious among some lawmakers at Syriza party. Ordinary people in the streets of Athens admit that they treat German anti-bankruptcy measures almost as personal humiliation.
Even now, when Greece is on the edge of full economy failure, banks remain closed for several weeks, a 44-year-old worker Panagiotis Trikokglou insists: “The only thing that I care about is not being humiliated by Schaeuble (German finance minister) and the rest of them”.
While Greece and Europe were striving to come to mutually beneficial solution, bitcoin used to profit from the crisis. Bitcoin use in Greece came up by 500% only for the last four weeks being a clear illustration that people tend to turn to cryptocurrencies in times when physical currencies fail.
Many Europeans cautiously follow what is going on in Greece and prefer to invest in bitcoin as well. Michael Casey, senior advisor at MIT Media Lab’s Digital Currency Initiative, explains: “You buy a bitcoin now because you think sometime in the future you’ll have your banks shut and your currency reintroduced. Gold was the old hedge against this sort of thing. Bitcoin is the new one”.
Creation of international bitcoin ATM network is seen as a way to allow people easily transfer money avoiding high fees of traditional money transferring services. The first bitcoin ATM was opened in Vancouver in October 2013.
The number reached 429 by now. Having a bitcoin ATM in Greece is likely to help at least some Greeks at this tough time. It’s planned to be opened in Athens on Saturday and it will offer a zero commission at the start. Thus caring relatives or friends all over the world can refill a digital wallet of someone in Greece.
Despite recent bitcoin boost it was really hard to predict anything in the sphere. Experts admit that steadily growth is always preferable but such crazy trading upwards should also be encouraged. Such rise is easy to explain by overall purchase of bitcoin in countries with shaky economy.
Only recently Wedbush Securities, American financial and investment company, reported that present situation could lead to fixing bitcoin price of $400 within forthcoming year. Continuing crisis in Greece and the ongoing selloff in China’s stock market were believed to increase influx of bitcoin funds.
Price for shares in the Bitcoin Investment Trust might rise from $30.60 to $40. “Such prices implies $6Bn market capitalization which we would also describe an option on bitcoin supplanting some payment volumes from Visa, MasterCard, PayPal and Western Union, who combine for less than #300bn in market cap,” says the report.
Now future fate of bitcoin market fluctuations is unknown. We will follow the situation in Greece. Apart from bitcoin bouncing cryptocurrency community has recently knocked off its pins when litecoin price went up by 200% in several days. Despite obvious instability of world financial markets it was astonishing.
Bitmex.com sees the roots of litecoin meteoric rise in Chinese market. So far litecoin price again dropped by 40% in several minutes thus making cryptocurrency market shake like never before.