The price of bitcoin rose to a four-month high on Sunday 5 July, as news broke that Greece had voted against the terms of an international bailout.
Bitcoin reached a peak of $273 (£175, €247) at around 6pm GMT on Sunday, according to the Coindesk Bitcoin Price Index. It was around this time that opinion polls in Greece suggested that the country had voted ‘no’ in the referendum.
About 60% of Greeks voted to reject eurozone cash-for-reform proposals, an outcome that several European leaders warned will result in the country leaving the eurozone – also referred to as Grexit.
Other cryptocurrencies also experienced significant surges in value, most notably litecoin. Often referred to as the silver to bitcoin’s gold, litecoin rose in price by 17% over the last 24 hours. This follows a month-long trend of gains, which has seen its market cap rise from $70m to $195m in the space of just 30 days.
Cash withdrawals in Greece have been limited to €60 per day, meaning citizens are forced to turn to alternative stores of value, such as gold and cryptocurrency.
Online bitcoin and gold exchange Vaultoro reccently revealed that it had recorded a 124% increase in deposits from users with a Greek IP address.
“Some people aren’t waiting for the government to figure out an exit plan and are doing it for themselves,” Vaultoro founder Joshua Scigala told Reuters. “You have people worrying about their family’s wealth or their life savings, and worrying that their money might be locked in banks. They’d rather hold money in a private asset like gold or bitcoin.”
It is not the first time that a crisis in the eurozone has caused a spike in the price of bitcoin, coming two years after the banking collapse in Cyprus led to a tenfold increase in the price of bitcoin.
“During times of economic uncertainty, people invest in #safe havens such as gold,” said Bitcoins Greece founder Elenu Varela in a recent interview with IBTimes UK.
“Nowadays, digital assets like bitcoin have joined that asset class. Because cryptocurrencies are global and do not rely on a healthy banking system, it is logical for people to stockpile them in times of uncertainty.”