It would appear that the imploding rule of law and currency weakness in Europe has done nothing but increase the value of a ‘haircut-proof’ digital currency. Since we first saw the ECB ‘bash’ Bitcoin in November of last year, when the central bank “stooped” so low as having to issue a 55-page pamphlet warning readers against “virtual currency schemes”, the value of the digital currency has risen from EUR10 to record highs around EUR53 currently.
The value of the virtual currency has soared nearly 15 percent in the last two days, according to the most-recent pricing data. “One hundred percent of that is due to Cyprus,” says Colas. “It means the Europeans are getting involved.” –businessweek.com
One of the side effects of the Eurozone crisis could be that some people turn to the deregulated, decentralised currency when they otherwise may not have even considered it. The events in Cyprus this past week, where it looked like the government, in desperate need of money, had planned to impose a levy on savings, coincided with a big spike in Bitcoin app downloads. The new currency has reached a new high of $67 US. It’s the third-largest spike in volume in the past month, but unlike the previous two the effect on the price has been only to increase it — the volume spikes on 7 and 12 March both drove the price down.
If you think your savings are under threat — from a banking collapse, government seizure or anything else — the traditional thing to do is withdraw your cash and stick it under a mattress. But could Europeans scared of losing their cash are turning to Bitcoins.
Bitcoin removes financial institutions completely from transactions, allowing users to conduct two-party exchanges over the Internet without a middleman. People can exchange local currencies into Bitcoins on online exchange sites and store them in e-wallets. Payment-processing services such as BitPay allow merchants to accept the currency as payments. The virtual money can buy a range of goods and services, including domain names, video strippers, gun parts,pizza and WordPress upgrades.
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