TORONTO – Greece’s financial crisis took a dramatic turn over the weekend as the struggling country shut banks and limited money withdrawals to residents. But the crisis may be good news for digital currency bitcoin, as residents try to find other ways to keep their savings safe.
Some experts are predicting that the so-called “Grexit” – the new term for Greece’s potential exit from the Eurozone – could take the cryptocurrency to its highest value in a year.
On Sunday the co-founder of bitcoin exchange BitPay, Tony Gallippi, tweeted that he expected the price of bitcoin to rise to between US$610 and US$1,250 if Greece exits the Euro.
Currently, one bitcoin is worth about US$250.
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On Monday, Greece’s banks and stock market were closed for the week after Prime Minister Alexis Tsipras’ surprise call for a referendum next Sunday on budget and reform proposals, which creditors are demanding the country should take in order to gain access to blocked bailout funds.
READ MORE: Pensioners swarm closed Greek banks amid withdrawal limits
Restrictions on cash withdrawals from ATMs are limited, and didn’t start dispensing money until the afternoon. People lined up all day to try to get their daily allotment of 60 euros ($66).
Anxious Greek pensioners waited for hours outside banks to hoping to receive their pensions.
But the country’s more tech savvy residents may be exploring other ways to store their money, in light of their country’s changing financial landscape.
Bitcoin-to-gold exchange Vaultoro.com has experienced a 140 per cent increase in web traffic from Greek IP addresses over the last few weeks.
“Because we trade bitcoin and gold, I think Greeks – especially because they have a long history with gold –might be using our exchange more than other exchanges because we allow them to instantly trade in and out of bitcoin with gold,” Vaultoro co-founder Joshua Scigala told Global News.
“The gold is held in their name and audited, so it takes the volatility risk out of it and I think that’s attractive to a lot of people.”
READ MORE: Should the average Canadian invest in Bitcoin?
Scigala said Greece’s failing economy is a good example of how cryptocurrency can be very useful, by allowing people to personally remove their money from that economy.
“It’s a really great way for people to empower themselves to not wait for some massive bureaucracy to decide what’s going to happen to their savings,” he said.
This isn’t the first time the digital currency has seen a boost thanks to failing economies.
In 2013, Cyprus imposed capital controls on banks in exchange for a bailout from the European Central Bank. Bitcoin prices soared 700 per cent between March and April in response.
Bitcoin’s value has been on a rollercoaster over the past few years.
In November 2013, its value soared to an all-time high of over $1,000 a coin, before losing nearly half its value in mid-December upon news that Chinese regulators banned financial institutions from using it.
With files from The Associated Press
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