A lot has been said about the economic woes that will follow a Greek decision to exit the Eurozone and reject bailout deal offered by international creditors to help the country improve its fortunes. In the midst of all this, however, Bitcoin enthusiasts are looking on the bright side of the whole situation.
Many economic experts, especially those outside Greece, see nothing but a disaster resulting from a referendum vote to quit the Eurozone and the common currency. But some Bitcoin advocates think whatever actions that will be taken the Greek government in the event of an exclusion from the euro, which looks highly feasible, will be greatly beneficial to the cryptocurrency.
People’s interest in alternative currencies, such as Bitcoin, usually spike when there is a financial crisis — at least in theory. The case of Bitcoin is particularly interesting in that it is decentralized and its value is not directly controlled by any central authority or government. Capital flight is an almost automatic outcome of a Greek decision to exit, but the government will very likely implement measures to counter such eventuality.
The interesting thing about capital controls in a country experiencing financial turbulence is that it makes digital currencies like Bitcoin more popular. People will turn to these alternative currencies as a way of getting their capital out of the country without any legal issues.
In a tweet, Bitpay co-founder Tony Gallippi expressed his expectation of bitcoin price soaring to between $610 and $1,250 if Greece is thrown out of the Euro, according to The Guardian. The prices forecast by the leading bitcoin payment processor executive are quite significant, given the cryptocurrency has been trading for around $250 for a while now.
This line of thought is influenced by what was witnessed in the course of the banking crisis in Cyprus about two years ago. The island country was forced to impose capital controls to check damaging outflows of money to somewhere else. That banking crisis is believed to have contributed to the impressive surge seen in the price of bitcoin a couple of years back.
However, Nathaniel Popper, author of Digital Gold: the Untold Story of Bitcoin, does not seem to agree that the surge in the cryptocurrency years back was down to the financial crisis witnessed in Cyprus. He told The Guardian’s Tech Weekly that the significant hike in price was more likely attributable to increased interest in Bitcoin from Silicon Valley, which pumped in huge amount of money.
Reddit users have reportedly started giving tips to individuals in Greece on how to purchase bitcoin to escape the impact of capital control expected in the country.
As the Greek crisis intensified over the past few weeks, bitcoin has been inching up gradually. But the cryptocurrency’s price is still nowhere close to highs of $1,000 per unit seen in 2014. Perhaps, the digital currency’s value is on its way to another high following the outcome of Sunday’s referendum on the appropriateness of submitting to further austerity measures.