Bitcoin surges as Grexit worries mount, posts best run in 18 months


LONDON Bitcoin surged by as much as 7 percent on Tuesday and was on track for its longest winning streak in 18 months, as concerns that Greece could tumble out of the euro drove speculators and Greek depositors into the decentralized digital currency.

Prime Minister Alexis Tsipras lashed out at Greece’s creditors on Tuesday as he defied a string of warnings that Europe is preparing for a “Grexit”. The debt-stricken country faces 1.6 billion euros ($1.8 billion) in repayments to the International Monetary Fund by the end of June.

Bitcoin, a web-based “cryptocurrency” invented six years ago, is not backed by or controlled by any government or central bank and floats freely, fluctuating according to user demand.

Though bitcoin’s value has previously been highly volatile, it has stabilized over the past six months and is increasingly treated as a legitimate and potentially valuable asset by major financial institutions, and even by governments such as Britain’s.

Joshua Scigala, co-founder of Vaultoro.com, a firm that holds bitcoin for its customers and allows them to exchange it for gold and vice versa, said that Greeks were buying the currency as their trust in the authorities waned. It is also unclear what currency would be used if a Grexit does occur — another potential factor driving Greek demand for bitcoin.

“Some people aren’t waiting for the government to figure out an exit plan and are doing it for themselves,” said Scigala.

“You have people worrying about their families’ wealth or their life savings, and worrying that their money might be locked up in banks … They’d rather hold money in a private asset like gold or bitcoin.”

Originally appeared at: http://in.reuters.com/article/2015/06/16/us-eurozone-greece-bitcoin-idINKBN0OW2DS20150616