Can the Bitcoin Economy Help Greeks Hide Their Wealth?

Greece continues to suffer from economic turmoil as European lenders and the International Monetary Fund (IMF) struggle to impose austerity measures across the country. Furthermore, in just over a month, in spite of Greek capital control restrictions, citizens have withdrawn 2.5 billion euros from regional banks. The turbulent economy in Greece may once again cause more demand for bitcoin as a safe haven.

Also read: 10,000+ EU ATMs to Cash Out Bitcoin

Will the Haunting of Grexit Bring Greeks Back to Bitcoin?

Greek citizens are only allowed to withdraw 1,800 euro per month due to capital control restrictions. However, the country’s capital flight policies have not stopped a vast amount of Greek residents from taking their funds out of the banks this past month. Throughout the years of economic depression surrounding Greece, bitcoin has become a widely suggested alternative currency for the country’s citizens. Demand stemming from the neighboring Republic of Cyprus’s debt problems had seemingly caused a spike in bitcoin’s price in 2013. In July 2015, the infamous Grexit also may have spurred demand for the cryptocurrency.

During the 2015 summer Grexit, bitcoin’s fiat value went from a low of US$225 per bitcoin to a high of $309. At the time, foreign lenders and Greek authorities continued to have problems maintaining the country’s volatile economy. Certain banks closed, ATMs were inoperable, and credit cards were shut off, alarming Greek citizens.

During the Grexit crisis, Bitcoin proponents began enticing Greeks to join the Bitcoin economy. Thanos Marinos, the founder of the bitcoin exchange BTCGreece, said demand had risen by 400 percent. Other companies, such as Coinbase, waived fees that month for Europeans and crypto-exchange Shapeshift CEO Erik Voorhees asked the Bitcoin community to send small transactions to Greek citizens. Furthermore, Coinbase noted at the time that even though Greek users were unable to use their platform, they saw a large spike in demand from surrounding European countries.

We're seeing about a 300% increase in bitcoin buys across all Europe in past few weeks (not much from Greece though, they aren't able to) — Coinbase (@coinbase) June 30, 2015

Bitcoin Storage is Safer than the Mattress

According to the publication Eidiseis, the latest spike in Greek withdrawals has shaken up the regional banking community. The publication’s sources say that the Union of Greek Banks believes that “time is not working in their favor.” Citizens once again may pivot back to storing wealth in homes, safes, mattresses, and possibly convert it to alternative currencies like bitcoin. There are few options for Greeks to learn about the decentralized money and obtain bitcoins. Localbitcoins is fully operational in Greece and prices are currently thirty dollars higher than bitcoin’s global average. Alongside this, there is a regular Bitcoin Meetup group in Athens and the city has two Bitcoin ATMs as well.

So far, worldwide economic turbulence in countries like Venezuela, India, Britain, and Italy has added more demand for Bitcoin’s benefits. The deadlock between Greece and creditors doesn’t seem to be going away anytime soon and citizens like Greek farmers are growing tired of austerity measures. The possibility of Greeks and citizens within neighboring countries finding solace in the digital currency’s store of value is probable. Moreover, digitally storing bitcoins securely is probably far safer than storing euros under the mattress.

Do you think this economic crisis could spur more Greeks towards Bitcoin? Let us know in the comments below.

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