Over the past week, the Bitcoin price has made its strongest move to the upside in three months - a move that took place just as the Greek debt crisis escalated.
The price of Bitcoin has jumped from a low of $240.22 on June 24 (according to CoinDesk data) to as high as $268.23 earlier today (Tuesday). That's a pop of 11.66% in one week.
Over the past month, the Bitcoin price is up an impressive 20%.
Meanwhile, concerns that the Greek debt crisis was reaching a critical moment have been building for weeks. Those fears were realized Sunday when the Greek government imposed capital controls and closed the Greek stock market.
A financial crisis like this is exactly why Bitcoin was created. Decentralized and beyond the control of governments, the digital currency is a safe-haven investment akin to gold.
This is why many have drawn a line between the spike in the Bitcoin price and the Greek debt crisis. But is there really a connection?
Could Worried Greeks Have Driven Up the Bitcoin Price?
According to CNNMoney, the world's largest Bitcoin exchanges were seeing big increases in customers from Greece.
Bitstamp, the world's third-largest exchange, said trades from Greece were up 79% over their 10-week average. The Germany-based Bitcoin.de said it had seen a tenfold increase in Greeks registering on its exchange. And Chinese exchange LakeBTC reported a 40% increase in visitors from Greece.
Other news outlets published similar reports.
"I don't think it could be for any other reason," Brendan O'Connor, CEO of digital currency-specialists Genesis Global Trading, told CNBC.
But skeptics point out that Greece is a relatively tiny portion of the overall Bitcoin market. Any increase in Bitcoin buying there wouldn't be likely to move the global Bitcoin price all that much.
And the most recent surge in the Bitcoin price is even less likely to have its roots in Greece. With capital controls in place, most Greeks don't have access to their money to buy Bitcoin.
What's more, Greece lags behind many other places in Bitcoin adoption. The country has just one Bitcoin ATM, and only about half a dozen merchants in Athens accept Bitcoin as payment.
But even if the Greeks themselves aren't responsible for the sudden rise in the Bitcoin price, it doesn't mean the Greek debt crisis isn't driving it...
The Real Reason Why the Bitcoin Price Is Rising
The Greek debt crisis is major news all over the world. The act of the Greek government imposing capital controls did more than generate sympathy for the affected Greek citizens.
It was a stark reminder that banks are not a safe place to have your money when a financial crisis erupts. And no one can be sure how much damage a Greek default will do to the global financial system.
Watching the Greek drama unfold, it's not hard to imagine investors around the world opting to put some money into Bitcoin as an insurance policy against trouble in their own backyard.
You see, capital controls aren't all that unusual. We saw them in Cyprus in 2013 and in Iceland in 2008. Those restrictions weren't lifted until earlier this month.
So yeah, an uptick in Greeks buying the digital currency might not affect the Bitcoin price much. But a surge in interest all over the world certainly would.
We got a little bit of evidence of that today from Bitcoin wallet company Coinbase, which tweeted that it seen "a 300% increase in Bitcoin buys across all Europe in past few weeks."
Bitcoin is gradually gaining traction as a safe-haven investment alongside gold. But unlike gold, Bitcoin is more easily spent and is ideal for circumventing capital controls (one big reason why it's popular in China).
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At the same time, Bitcoin is not suitable as a replacement for fiat currencies. Neither Greece nor any other country will ever adopt Bitcoin as its national currency. But the current events in Greece - not to mention rising fears of a reprise of the 2008 financial crisis -- also demonstrate that Bitcoin does have a role to play.
"It's money the government can't touch," Peter Kirby, CEO of Bitcoin startup Factom, told Fortune. "If I were a Greek citizen right now, I'd be scared out of my mind. The fact that you can put your money in Bitcoin and wait out what happens is very useful. Given the choice of a Greek bank or Bitcoin, I'd take Bitcoin all day long."
Follow me on Twitter @DavidGZeiler.
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About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.