Europeans Flock to Bitcoin Amid Greek Crisis

As Greece reaches a crisis of epic proportions, many Europeans are looking to put their money elsewhere. In addition to commodities and other government-issued currencies, bitcoin is seeing an uptick in volume.

“Volumes in the last 48 hours have been about 300% higher than they have been,” said Fred Ehrsam, co-founder of Coinbase, about bitcoin transactions in Europe this week. They are “becoming aware of what it really means to have money in their bank account.”

The value of bitcoin is up over 10% since Friday, according to the NYSE Bitcoin Index. One bitcoin was valued at $266.24 dollars on Tuesday.

Anthony Watson, CEO of Bitreserve, has seen “a lot of activity around the Euro” on their financial platform this week. In addition to digital currency, people are looking at other fiat currencies, gold, oil and even investing in cell phone minutes through Bitreserve.

The Greek situation exemplifies what proponents of the digital currency have been saying all along -- that there needs to be an alternative to government-backed money in times of crisis.

“The fact that their ATMs have no cash tells you a lot about how digital currency could be important,” said James Robinson IV, managing partner at RRE ventures.

But others are quick to point out that bitcoin values have also been volatile. In late 2013, one bitcoin was valued at nearly $1000 U.S. dollars.

“It bounces around like a jack rabbit,” said Watson. “People don’t have any confidence that it will have the same value tomorrow.”

Watson said that while it is gaining traction in Europe, most people in Greece are still unfamiliar with bitcoin. “Laypeople in Greece don’t know what bitcoin is. They are still struggling with the concept of what a cryptocurrency is,” Watson said, referring to the concept of secure digital money.

But if Europeans do not know about bitcoin already, they will soon, said Ehrsam. The crisis is a “wake up call for Europe” and is resulting in “more and more global awareness of bitcoin.”