The start of this month marked a state of turmoil throughout Greece. The announcement of a vote to help decide if Greece should allow the European Union to bail out Greece caused massive amounts of Greek citizens to make a run for the bank, and withdraw their balances. The terms for the bailout included seizing the savings of citizens, as well as limiting the amount of freedom citizens had in regards to their money. In response to the bank run, many banks closed, and there are currently heavy limitations on the bank accounts of all citizens throughout the country.
In response to this crisis, citizens throughout Europe looked to Bitcoin, in order to secure their savings from their governments. During this time, searches for Bitcoin within Europe increased dramatically, and transactions saw a significant increase as well. More importantly, this event led to the price of Bitcoin increasing over $20, eventually hitting a high of over $270, the highest the price has been since March.
Although the action took place in Greece, it was primarily the rest of Europe who bought Bitcoin. Bitcoin purchases did take place in Greece, however many citizens are still unable to withdraw a majority of their savings, and those who have been able to, have already averted the crisis. In reality, the areas that saw the most Bitcoin purchases were countries like France and Italy, where citizens are experiencing a weak government.
In times like these, citizens throughout the world look to a “safe haven” currency, that can ensure the labor and effort that went into accumulating money does not go to waste. For the past 6,000 years, this safe haven currency has always been gold. Surprisingly, that was not the case this time. An increase in gold purchases this past week was negligible at best, and the price of gold actually dropped 5% during this time.