| LONDON, June 16
LONDON, June 16 Bitcoin surged by as much as 7
percent on Tuesday and was on track for its longest winning
streak in 18 months, as concerns that Greece could tumble out of
the euro drove speculators and Greek depositors into the
decentralised digital currency.
Prime Minister Alexis Tsipras lashed out at Greece's
creditors on Tuesday as he defied a string of warnings that
Europe is preparing for a "Grexit". The debt-stricken country
faces 1.6 billion euros ($1.8 billion) in repayments to the
International Monetary Fund by the end of June.
Bitcoin, a web-based "cryptocurrency" invented six years
ago, is not backed by or controlled by any government or central
bank and floats freely, fluctuating according to user demand.
Though bitcoin's value has previously been highly volatile,
it has stabilised over the past six months and is increasingly
treated as a legitimate and potentially valuable asset by major
financial insitutions, and even by governments such as
Joshua Scigala, co-founder of Vaultoro.com, a firm that
holds bitcoin for its customers and allows them to exchange it
for gold and vice versa, said that Greeks were buying the
currency as their trust in the authorities waned. It is also
unclear what currency would be used if a Grexit does occur --
another potential factor driving Greek demand for bitcoin.
"Some people aren't waiting for the government to figure out
an exit plan and are doing it for themselves," said Scigala.
"You have people worrying about their families' wealth or
their life savings, and worrying that their money might be
locked up in banks ... They'd rather hold money in a private
asset like gold or bitcoin."
Scigala said over the past two months, with Greece locked in
talks with its creditors, the company had seen a 124 percent
pick-up in inflows from Greek IP addresses - numerical labels
that identify computers and other internet-enabled devices.
Bitcoin traded as high as $252.05 on the Bitstamp exchange
on Tuesday, its strongest in over two months, before
easing a little to $245.21, still up around 4 percent on the
day. That marked its sixth straight session of gains -- its best
run since January 2014.
In March-April 2013 bitcoin's value shot up by almost 700
percent in just over a month, as Cyprus clamped down on
withdrawals and seized deposits, rattling faith in fiat
Paul Gordon, founder of bitcoin firm Quantave and a board
member of the UK Digital Currency Association, said that
although he did not share the view that worries about Cyprus had
driven that rally, Grexit fears could be driving the current
one, with more people now aware of bitcoin.
"This time round, the worries about Greece could be
filtering through. (Bitcoin) could provide an alternative outlet
for some people who are concerned about capital controls, along
with more traditional methods."
Some have suggested that a bitcoin-like digital currency,
backed either by Greece's assets or future tax revenues, could
be introduced as an parallel currency to the euro in Greece in
order to avert an exit from Europe.
($1 = 0.8881 Euros)
(Reporting By Jemima Kelly; editing by Ralph Boulton)