Greece has become the first developed country to fall into arrears with the IMF as it missed its 1.6 billion euro payment due Tuesday night. At the same time, several bitcoin companies have been reporting of a massive spike in bitcoin buying and overall interest from all over the Euro zone.

On the brink

A last minute deal failed to be reached and now it looks like talks will be at a standstill until Greece has a referendum on July 5 in which the people will vote yes or no to the terms offered by the EU. By defaulting on the payment, Greece has been added to a distinct list that includes countries such as Zimbabwe.

For many analysts it was almost a certainty that a deal would be reached before June 30. Now there is a real possibility of default and a “Grexit.” More payments are due and Greece has no way of paying them.

There was a last ditch attempt to make a deal when Alexis Tsipras, the Greek prime minister, requested £21billion to keep his country afloat for the next two years, but thus was rejected by German Prime Minister Angela Merkel thereby shutting the door on repayment before the 11 pm deadline.

The other complicating factor is that any new deal will require agreement by all 19 Euro zone countries and the IMF. In turn, the fear of default and contagion to other countries in Europe (particularly Spain, Italy and Portugal) has become more real. The experiment of integration has been a 60 year work in progress, which is in danger of unraveling.

Some banks to reopen

Capital controls were imposed Sunday and the daily withdrawal limit for holders of credit and cash cards has been set at a maximum of 60 euros causing long ATM lines throughout the country.

To help pensioners who are not tech savvy and unable to access their funds otherwise, Greece has promised to reopen 1,000 bank branches starting Wednesday. Pensioners will be able to take out up to €120 of their pension - as many of them don't have credit or debit cards.

Greek bailout fund

Meanwhile, an online crowdfunding campaign was started by a London shoe shop worker who is aiming to break the impasse by collecting a Greek bailout fund of his own. As of Wednesday, over half a million Euros had been raised from over 40,000 people.

Bitcoin rising in Greece & EU

As Greece has suddenly turned into a fully-fledged crisis, bitcoin companies have started reporting that there has been a huge spike in buying and interest throughout the Euro zone. Coinbase tweeted out:

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

While new users might not be coming from Greece directly, it certainly is no coincidence these buys have come as the Greek situation deteriorates. The price has also been on the rise in recent weeks as well as the chart below shows.

While Coinbase is the biggest of all the bitcoin companies to see buying and interest rising throughout Europe, others have confirmed this trend as well.

Ten times as many Greeks are registering to trade bitcoins on the German marketplace Bitcoin.de than usual, according to CEO Oliver Flaskaemper. Bitcoin trades from Greece have shot up 79% from their ten-week average on Bitstamp, the world's third-largest exchange.

Chinese bitcoin exchange LakeBTC is also reporting a 40% increase in visitors from Greece while Polish exchange Bitcurex has been flooded with emails asking whether bitcoin is legal currency in the EU and if Bitcurex can be used as a bank account.

Bitcurex took advantage of the situation and began marketing directly to Greeks offering “No Fees for Greece!" following the footsteps of Coinbase this week after it waives fees for buyers paying with Euros.

The founder of Greece's only bitcoin exchange BTCGreece, Thanos Marinos, confirmed the rise in Bitcoin popularity, telling Cointelegraph:

“Yes the demand the last 4 weeks has risen by 400% and newly registered customers by 600%.”

“People are in shock as they never expected to have closed banks and at the same time risking being out of Eurozone and euro currency soon,” he added.

Meanwhile, others argue that Greeks are not really flocking to bitcoin due to technology constraints and limited access to bitcoin in Greece. Not only because there’s only one Greek exchange and one bitcoin ATM, but because most Greeks are scrambling to get Euro notes to cover their day to day needs.

Thus, most of the new interest is springing up in other EU countries such as Italy and Spain who are looking closely at cryptocurrency as a hedge against the potential contagion and the risk of wealth confiscation by the state.

Now what?

As the Greek Tragedy continues to unfold and all the twists and turns associated with it, this could be a turning point for bitcoin, which has been in a bear market for well over a year.

While it’s related directly to Greece along with a combination of other factors yet to be determined, one cannot deny what these bitcoin companies are witnessing.

While it is probably too late for Greeks to start buying bitcoin in droves as fiat currency reserves dry up, anything can happen between now and the July 5 referendum as the FT reports that the ECB is "poised to impose tougher haircuts on the collateral Greek lenders place in exchange for the emergency loans."

Currently, the imposition of capital controls seems to have increased support in the referendum's "yes" camp, but "no" is still in the lead.