The news for the last few weeks has been that the latest embodiment of financial crisis in Cyprus is causing Cypriots to buy Bitcions, and this is part of the reason Bitcoin prices are rising. This seems extremely unlikely to me.
Agreed - the situation in Cyprus, where ordinary citizens woke up to find the threat of a 10% deduction on their bank accounts, subsequently causing a run on the ATMs, is draconian for recent times. It's not unprecedented though - throughout history governments and kings have arbitrarily seized people's assets . But it's been a bit of an eye opener for a lot of European citizens, previously living in a cotton-wool padded world where small bank accounts were presumed to be safe.
But why would Cypriots move from savings accounts to Bitcoin? It still takes a fair amount of technical or at least economical knowledge, and time as well, to set up a Bitcoin wallet, register with an exchange, and start buying Bitcoins. Unless people were flying in with laptops and printers to generate and hand over Bitcoin certificates to people in the market place (no reports of that), then mass-Bitcoin buying seems unlikely.
Furthermore, bank accounts were frozen. So how were they paying for the coins they were supposedly buying?
Finally, if as a Cyprus bank account holder, you managed to get your hands on your cash, why trade it in? You've got your savings. The rational response would be to hide it in a safety box somewhere, or just possibly convert it to something valuable and familiar like gold. Moving it to an experimental cryptocurrency still in its infancy seems like an unlikely choice.
And the same goes for the Bitcoin ATM story - in these uncertain times why would anyone in Cyprus insert the spare cash from their wallets into a strange machine to get Bitcoins?
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