Bitcoin in the Headlines: More Hot Air for Greece

As Greece gets to grips with its upcoming bailout referendum the media has taken its coverage of bitcoin to a whole new level.

AccessTimeIconJul 3, 2015 at 5:05 p.m. UTC
Updated Mar 6, 2023 at 3:00 p.m. UTC
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Bitcoin in the Headlines is a weekly look at bitcoin news, analysing media coverage and its impact.

This week was by no means the first time the mainstream media has connected Greece's looming debt crisis to bitcoin.

As the country gets to grips with the controversial bailout referendum that will decide the country's future in the eurozone this Sunday, the media has taken its coverage of the digital currency to a whole new level. At the time of publication, a quick Google news search resulted in over 100 articles.

Given the country's cashflow restrictions and bank closures, journalists have taken to explore bitcoin's potential in Greece.

CoinDesk has taken a look at the top bitcoin related headlines from across the globe.

Wooing the Greeks

greece heart
greece heart

A regular on the bitcoin weekly scene, Fortune's Daniel Roberts wrote a piece which highlighted the ways in which bitcoin companies were trying to attract the attention of Greeks.

"As their country's financial system collapses, Greek citizens are desperate to access their money. And vocal businesspeople elsewhere in the world are eager to inform them that they have another option: bitcoin," he said.

Roberts noted Coinbase had waived transactions fees for euro purchases made until 5th July – coinciding with the date of the referendum – in an attempt to encourage bitcoin purchases.

Accurately, however, Roberts pointed out "leading Greeks to the digital currency isn't so simple".

He continued:

"Right now, in fact, there are very few ways for anyone in Greece to even obtain bitcoins. Their banks are closed for a week; their ATMs are limiting them to withdrawing €60 per day; and as of Tuesday, they cannot use Greek credit or debit cards for online transactions. That means they can't even take Coinbase up on its offer."

It seemed that bitcoin was doomed to remain untouched, despite the efforts of companies operating within the space.

However, Fred Ehrsam, cofounder and president at Coinbase, cited in the article, said the company's motive was to appeal to Europeans who are not in Greece.

"There's little that [bitcoin companies] can do for people on the ground in Greece. The bigger deal here is if you're sitting in Italy, Spain, or Portugal, and you're getting a little nervous, maybe it makes more sense to put value into bitcoin where you're less susceptible to these things. The doomsday way of saying it would be, 'Do it before it's too late'."

After all, Spain, Portugal and Italy are also familiar with the consequences of external debt.

Bitcoin vs gold

bitcoin vs gold
bitcoin vs gold

There is no doubt that Greece is struggling, but why are its citizens not turning to one of the oldest forms of money – gold?

That's exactly what CNBC's Brian Kelly questioned in a piece titled "Greece is in crisis – why no love for gold?"

The precious metal will remain unloved because this is a political crisis, not a currency crisis, he said. "The primary reason you buy the "barbarous relic" that is gold is fear of a global currency crisis."

Kelly is right. The onset of the Global Financial Crisis and the rapidly declining stock markets triggered a stampede of gold purchases between 2007 and 2008.

He added:

"In Greece, citizens and investors are not concerned about having a currency to use; the only unknown is which currency they will adopt or create. Currently, the Greek citizens have a currency, the euro, but using it is next to impossible with the banks closed."

According to Kelly, gold is only useful in the aftermath of a complete currency collapse. For this reason, he believes the precious metal will remain untouched as long as there is a viable alternative. "Gold is both useful and valuable — just not in a political crisis."

Political crisis

Although there is no denying that Greece is feeling the widespread effects of an economic crisis, outlets across the world joined Kelly, noting the crisis was as much political as it was economic.

The BBC headlined a piece "Politics trumps economics in Greek debt crisis' and Channel 4's Paul Mason exposed a similar viewpoint in a piece titled "Greece crisis: a failure of economics in the face of politics".

Additionally to high youth unemployment rates, Greece's public debt currently stands at a staggering 177% of its Gross Domestic Product (GDP); the highest in the European Union.

Despite explaining his sources had not verified a surge of bitcoin buying attributable to Greece, Kelly said that this did not mean that the Greek crisis was unrelated to the recent price spike.

"That is not to say that Greece is not the reason for the recent rise in bitcoin – it is. Speculators have been buying up bitcoin as a safe-haven alternative asset – more specifically an asset that trades 24 hours a day, 365 days a year and is out of reach of government decrees on bank closures or bail-ins."

According to CoinDesk's Bitcoin Price Index, the digital currency experienced a relatively small increase in value, spiking to $266.15 on 30th June.

coindesk-bpi-chart (2)
coindesk-bpi-chart (2)

Since then, bitcoin's price has declined, hovering around the $250 mark at the time of press. This tiny price movement would have gone unnoticed any other day in the digital currency's volatile history, however it seems to have captivated the imagination of the press today.

More talk than walk

empty pockets man
empty pockets man

Marketwatch's Francine McKenna added to the debate with a piece titled "For Greece, bitcoin is more talk than a reality".

The journalist cited Antonis Polemitis, managing director of New York-based Ledra Capital and an instructor in the first master of science degree in digital currency at the University of Nicosia in Cyprus.

He told McKenna:

"However, Greece has a low adoption rate for bitcoin and it is too late now for anyone other than the previously converted to take advantage of its functionality for this crisis."

The journalist continued to note that the country's low bitcoin adoption rate is a function both of interest and aptitude. "Its access to the euro is an advantage for a citizenry that craves a stable, easily convertible currency. Even if the country were to revert to its patrimonial currency, drachmas, Greek citizens will probably still rely on euros since, as citizens of Europe, their lives and economy are tied up with their neighbours."

According to Mckenna's piece, the digital currency's adoption is still limited to tech savvy citizens who may want a practical, rather than a political, alternative to what is perceived to be a unstable global banking system.

Citing George Papageorgiou, a faculty member on the University of Nicosia’s digital currency MSc program, the article noted:

"The financially unsophisticated, the elderly, and those too stressed to take the time and spend the money to get established will continue to find bitcoin a logistically difficult alternative."

However, Kelly still sees potential for the digital currency to thrive in Greece:

"An asset unencumbered by political crisis that can be used as a medium of exchange at over 100,000 merchants is just ONE of the many use cases for bitcoin and block-chain technology," he concluded.

Whether bitcoin will help Greece in its time of need remains to be seen. One thing is for certain, the Greeks are quickly running out of options. Banks remain closed and just yesterday, Shelly Banjo, a Quartz journalist, reported PayPal was no longer in the country, shutting its population off from online payments.

Greek protest image via Yiorgos GR/Shutterstock.comgold bullion, Greek flag and pocket images via Shutterstock.


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