Bitcoin Rises As Greece Falls… Coincidence?

Bitcoin has gained about 3 percent over the past week and nearly 10 percent since the beginning of June. The cryptocurrency's rise just so happened to coincide with the rapidly deteriorating situation in Greece, leading many to believe that the two are linked. While some claim that that crisis in Greece marks a perfect opportunity for the rise digital currencies, others say the two events are unrelated.

Greek Users Rise

reported that Germany's bitcoin exchange Bitcoin.de said the number of Greeks using the cryptocurrency marketplace has increased by 79 percent, while China's LakeBTC has seen a 40 percent increase in users based in Greece. Those figures suggest that the spike in demand for bitcoin can be largely attributed to the ongoing situation in Greece.

It makes sense that Greeks would rush to bitcoin at a time when their money is being restricted by capital controls and their future in the EU is uncertain at best. Bitcoin is an attractive option as an alternative to government-backed currencies, especially when your government looks to be sinking. While their banks may be cut-off from euros, Greeks holding bitcoins will always have access to their funds.

Others say that Greeks aren't the reason for Bitcoin's price bump. Critics argue that while the number of Greek users may be increasing, so is the number of users in other nations. Some believe that because Greece's culture isn't historically tech-savvy, the chances of a bitcoin revolution are scant. Capital controls restricting Greeks from accessing their euros only went into place this week and some say that the majority of the nation's residents would turn to euros rather than bitcoin in times of trouble.

Not only is a Greek surge in bitcoin use unlikely, but

it is simply untrue. Bitcoin Charts reported just 6 percent of its bitcoin transaction volume taking place in euros while storage platform Bitreserve said only 6 percent of the bitcoin it held was in euros.

Hedging Against Risk

While Greece itself may not be the cause for bitcoin's surge, the currency could be experiencing a boom as users across the world look for ways to hedge against uncertainty. Greece's issues certainly play into global economic issues, but many analysts say it isn't Greece alone that is causing more and more people to turn to bitcoin.