“Grexit” + Bitcoin: Opportunity for Investors?

bitcoinSo Bitcoin’s current jump in value is coinciding with Greece’s current economic crisis. Coincidence? Cause and effect? The pundits seem to be all over the map on this one and, in fact, the answer to this one might fall somewhere in the middle. You can be sure that international investors are watching what’s going on in Greece and considering what could happen if an economic crisis anywhere in the world hits home. Even if not as many Greeks are getting involved in Bitcoin as we’d like to think, that doesn’t mean that an economic crisis so bad that banks are being shuttered and withdrawal limits are being placed on ATMs isn’t having an effect.

It’s not that some Greeks wouldn’t be interested in Bitcoin as a way to protect their savings. They are suddenly experiencing issues with making Paypal payments and their credit cards are being blocked when they try to shop online. Even when they go shopping at whatever passes for a mall in Greece, it’s likely that they won’t be carrying much more than 60 euros (the current withdrawal limit) in cash at any given time. They’ll naturally be looking for ways that they can access and use their money even if it means moving it away from the euro and, in fact, the Polish exchange Bitcurex reported an upswing in emails from Greece with questions about Bitcoin. This is an arena where the concept of rational self-interest kicks in and they want to make sure that they aren’t the ones who pay for the irresponsible behavior of entities with more economic clout than them.

At this point, Greece has very few options that aren’t going to hurt on some level. They could admit that they’re bankrupt and watch their markets crash — and, in fact, Greece has just defaulted on a $1.7 billion payment to the International Monetary Fund. They could leave the Eurozone and cut all ties with the European Union’s central bank. Any option is going to be painful for Greece but attractive to investors who understand that, according to the very quotable Rules of Acquisition, “even in the worst of times, somebody turns a profit”.

The Greek economic crisis isn’t happening in a vacuum. Savvy investors are watching the situation and the recent surge in Bitcoin’s value may be an indication that speculators are betting on a meltdown that could easily send some serious ripples through the entire Eurozone. Some Bitcoin watchers are even pretending that Greece has nothing to do with it. After all, Greece is just one country and not even the only one that is having economic troubles. However, it may well be incorrect to say that a possible Greek bankruptcy or even a “Grexit” will have no effect. As Kim Dotcom noted in a tweet on June 20:

It is likely that a #Greece bankruptcy will trigger a market crash. My advice: Buy #Bitcoin & #Gold Both will rise when the markets crash.

Gold is one traditional safe haven in times of economic crisis. When Donald Trump doesn’t seem to mind accepting 96 ounces of gold as a deposit on a commercial lease – okay, the guy’s a masochistic jerk who recently provoked Mexico into making piñatas out of him, but that should tell you something about the validity of a store of value that has been around a lot longer than either the euro or the U.S. dollar. Nobody knocks it because it’s been known to work ever since Ogg helped Ugg build a fire, and then Ugg handed Ogg a shiny rock that he could redeem later for food.

The same should go for Bitcoin, a currency that recognizes no international borders, is tied to no national government, and can hold steady in times of economic crisis. There should be nothing revolutionary about the idea that Bitcoin is basically an upgrade for gold that can work now that most of us aren’t cavemen anymore. Greeks are facing some severe limits on dealing in their own currency and that’s painful for the ones who didn’t see it coming. You can be sure that investors are watching and maneuvering themselves into a position where they can profit even when the economic environment is painful. For a lot of investors, that means Bitcoin.

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