Best Bitcoin Exchange for Greece

As we already described in a different article, capital controls have indeed been introduced for all Greek citizens. But not only that. The government has decided on a whole package of measures for this week. Almost 11 million people are affected. Many had already withdrawn as much cash as possible from their accounts in recent weeks.

The measures at a glance:

• Until Monday afternoon ATMs could not be used at all
• According to this, Greeks may withdraw a maximum of 60 euros per day.
• Online banking works, but no transfers abroad
• Banks to remain closed until at least 05 July
• The Athens Stock Exchange will remain closed for the time being
• Credit cards only work to a limited extent
• Foreigners can withdraw money without restriction → As long as the ATM still has money

No one can say at present whether the capital controls will be extended or not. Depending on how the situation develops, some measures – such as the ban on cross-border transfers – are likely to be extended for the time being.

The first hamster purchases are the consequences of these measures. In particular, hygiene products and food are being bought on a massive scale. Gasoline is also becoming scarce. In response, public transport in Athens and the surrounding area may be used free of charge until 07 July. On the weekend a referendum is to take place by voting whether Greece accepts or rejects the claims of the creditors – with all consequences resulting from it.

Bitcoin the solution in this situation?

Of course, a crypto currency like Bitcoin is not the panacea in this delicate situation. A currency, however constructed it may be, cannot solve the structural problems that currently prevail in Greece. But these days we are seeing who really has their “own” money at their disposal. From now on, a state can freeze all assets held in bank accounts. And this is exactly one of the reasons why Bitcoin was created: Independence from state and politics.

And yet the Greeks are still ripping for the digital currency, at least that’s what the CNNmoney financial portal reports. According to this, all major Bitcoin stock exchanges around the globe are recording a significant increase in trade from Greece. Many Greeks are actually having their first points of contact with the crypto currency these days.

Oliver Flaskaemper, CEO of Bitcoin.de, told CNNmoney that ten times more Greeks register on the platform than usual. The transactions from Greece had also increased by 79 percent. Even a Chinese Bitcoin stock exchange – LakeBTC – recorded a 40 percent increase in Greek participants.

Over the weekend, the Polish Bitcojn platform Bitcurex received an e-mail flood of enquiries from Greece. Questions like “Is Bitcoin a legal currency in the EU?”, “Can I use Bitcurex like a bank account?” or “Do you have Bitcoin ATMs in Greece? Bitcurex made a special offer for Greeks: “No Fees for Greece”. Greeks are allowed to use the Polish platform for 3 months free of charge.

This phenomenon of people looking for alternatives in such crises was already observed in 2013, when Cyprus also introduced capital controls. As a result, the Bitcoin price rose by more than 700 per cent – but what actually caused the boom remains to be seen.

Bitcoin in everyday Greek life

But as hopeful as all this may sound, in everyday Greek life it is anything but easy to buy Bitcoins and use them on the other hand. Due to the limited transfer traffic, no Greek can transfer money abroad. But this is exactly what is needed to buy Bitcoins. According to CNNmoney’s report, there is only one Bitcoin ATM in Greece – in a bookshop in Athens. So if you haven’t already taken precautions, it’s very difficult to get your hands on Bitcoins.

Please note: A Bitcoin ATM works a bit differently than a conventional ATM. With the so-called Bitcoin ATMs, euro notes have to be inserted into the machines. Then you have to specify to which wallet the converted Bitcoins are to be transferred. Or you can sell Bitcoins from your wallet at the ATM and receive Euro.

Payment with Bitcoin is also difficult. Very few shops accept the online currency as a means of payment. If you have a Bitcoin debit card, you can withdraw euros from ATMs, but who benefits if the banks have too few banknotes to fill them? Another view is that the government is introducing Bitcoin as a parallel currency. Columnist Wolfgang Münchau already brought this idea into play a few weeks ago We also reported on this – Bitcoin as a parallel currency for Greece?

The threatening Grexit responsible for the price rise?

The Bitcoin exchange rate has been quite strong over the last few days. Many assume that Greece’s imminent withdrawal from the euro zone is responsible for this. Tony Gallipi, co-founder of Bitpay, sees the Bitcoin exchange rate even between USD 610 and USD 1,250 when Greece flies out of the euro zone. But these assumptions are more than bold for two reasons:

The total EUR/BTC trading volume (i.e. all Euro transactions) is only 6 percent of the global Bitcoin volume.

Greek share in EUR/BTC trading is negligible

This means that the increased demand from Greece does not at all have the power to drive the share price so far upwards. On the contrary, speculators are driving the market upwards, taking advantage of psychological factors. Surely it can lead to a huge price explosion. But if this is only based on assumptions such as a “Grexit”, it will end exactly as it did after December 2013 – when the Bitcoin rate dropped from over 1,000 US dollars to 200 US dollars.

Capital controls in Greece – Dealing with Bitcoin?

In the last few weeks it had become reasonably quiet on the Bitcoin stock exchanges. Since the beginning of the year, the price has more or less fluctuated around the 230 US dollar mark. Last week, however, the Bitcoin price reached the USD 257 mark again for the first time. The decisive factor, however, is not the brand itself, but the rapid pace. One can say that within a few hours the rate had risen by 10 percent. The theories for the price rise are manifold.

However, one thing must be mentioned in advance: As spectacular as the price development sounds, it is also “normal”. Normal in the sense that such volatility occurs more frequently in crypto currencies.

Many observers and market participants are now saying that the forthcoming Grexit is the reason for the current price development. We already reported a few weeks ago that Bitcoin could be a parallel currency or alternative for the current crisis. Greek Finance Minister Janis Varoufakis was also concerned about this issue. On his blog in February 2014 he wrote an entry entitled “Bitcoin: A flawed currency construct with a useful lesson for the euro zone”. In this article he compares the digital currency with the gold standard of the 1920s and 1930s. The economist warns: “The Bitcoin is a hardcore version of the gold standard.” For him, Bitcoin is even more dangerous than the euro. As an alternative, he also proposes a digital currency, which is, however, controlled by the state: FT-coins (“Future Taxes”).

The online edition of “Die Welt” takes a closer look at this construct by Janis Varoufakis and concludes: “The Athenian’s plan is therefore an intellectually exciting construct, but will probably remain an illusion. It seems more realistic that the Bitcoins, reviled by Varoufakis, are rediscovered.”

A rediscovery of the Bitcoins

Why should Bitcoins experience a rediscovery in this context? A look at recent history gives us the answer. In 2013, during the financial crisis, Cyprus first introduced a restriction on monetary transactions and then even a partial expropriation of savers. Half of the assets in excess of 100,000 euros were withheld in order to restructure the state budget.

• Exactly the same procedure now threatens Greece. Citizens would then have only limited access to their assets and transfers abroad would be controlled by public authorities and would have to be authorised.
• Aaron König sees a way in which savers could evade these controls: “For Greek savers it could very well be interesting to exchange part of their money for Bitcoins in order to avoid impending capital controls.
• After all, the digital currency cannot be blocked, confiscated or controlled. Greek citizens would thus have an ideal opportunity to circumvent the imminent capital controls.

But does Bitcoin help anyone if the acceptance in daily trade is rather low? Yes, because with Bitcoin debit cards, users can use their Bitcoin Wallet to withdraw the respective local currency from any ATM. And all this without any government controls.

Greeks buy Bitcoins

Oliver Flaskämper, Managing Director of the Bitcoin.de trading centre, reports increased turnover on the Bitcoin exchanges: “In recent weeks, more and more people from Greece have registered”. The situation reminds him of the Cyprus crisis in 2013. He also attributes the price increase of the last weeks to the current debates: “We attribute this above all to the concerns in the market that Grexit, i.e. Greece’s withdrawal from the euro, is imminent.

Back in the wake of the Cyprus crisis, the Bitcoin price also rose from 20 euros to over 160 euros within a short period of time. But then it fell again by 50 percent within a few weeks.

In contrast to Flaskämper’s statement, other European Bitcoin stock exchanges, such as Kraken or LocalBitcoins, do not report any special occurrences in the registration of Greek persons: “We do not see any significant increase in Greek user numbers that deviate from normal trading. Although the entire BTC/EUR trade has picked up somewhat, it still corresponds to the traditional trend,” says Max Edin of LocalBitcoins. In fact, both the number of transactions and the trading volume of

Bitcoins have been rising steadily for over a year

Edin therefore doubts that the current price increase has anything to do directly with increased activity from Greece: “The volume from Greece is so small in comparison to the total volume that it cannot trigger any significant price movement”. Jesse Powell CEO of Krake also confirms this: “It is difficult to say what influence Greece had on the increased trading volume, or whether it was ultimately a matter of speculation. He then warns: “If it turns out that the price increase was purely speculative and the Greek theory does not prove true, the price will probably not be able to continue the current trend”. Other experts have a similar view. For them, the current situation in Greece has at most a psychological effect. Even during the Cyprus crisis, not all citizens suddenly exchanged their money for Bitcoin. There was a general increase in the value of many assets.

At the moment, however, it looks as if the Bitcoin share price has bottomed out after the dramatic slump. The Greece discussion has certainly contributed to Bitcoin’s regaining public focus. But another steep rise is probably not imminent. Timothy Enneking, manager of the Crypto Currency Fund, takes a similar view: “The price has been stable for so long that it was time for it to rise. Greece may have had an additional psychological effect.”