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Greece is not Buying Bitcoin

Last Updated March 4, 2021 4:44 PM
P. H. Madore
Last Updated March 4, 2021 4:44 PM

There are many factors to consider when monitoring the value of something such as Bitcoin. There is a certain psychology of markets that must be understood before making too many predictions. One is that positivity breeds more positivity. When people are feeling good about Bitcoin, they place more buy orders for it. When they are feeling negative or less hopeful about Bitcoin, they place more sell orders. Either case can affect the price in a significant way.

There are many, surprisingly in wider mainstream outlets, who have attributed the recent relatively small gains of the Bitcoin valuation to the crisis in Greece. There are several things to understand about this assumption before debunking it. One is that the problem in Greece is anything but new. Greece eventually exiting the Euro has been mentioned for some time, and any Greek paying attention to current events would have made their purchases long before now when the cash machines are running out of money. Another thing to understand about this assumption is that it is based on a falsity: people in Greece cannot access Bitcoin at the moment, at least not by any of the normal means. It would require a massive effort to execute a sizeable order of bitcoins through Greece at the moment. So if the trading has happened since the crisis began, then it’s not significant enough to matter because it can’t be. The framework is simply not in place to execute orders from Greece at the moment. Coinbase, one of the top sellers of Bitcoin in the world, confirms as much in their recent tweet:


This is leaving aside the fact that the GDP in Greece is roughly 80 times more than the entire market capitalization of Bitcoin. The top one percent of this would still be seven times as much as all bitcoins that exist are worth, in rough figures. Thus if we were witnessing a large exit of Greece and the Euro by wealthy Greeks, in the direction of Bitcoin, we would be seeing billions and billions of Euros flowing into Bitcoin, not several million. The simple fact is that Bitcoin could not sustain this kind of exit if it were going on. These orders would be in the queue for a very long time, and demand would be far higher than supply, and the price might be all over the place.

There is a trigger finger mentality in the Bitcoin space, where many monitor things from perhaps too close and interpret changes as being far more significant than they are. In terms of Bitcoin, the growth we have seen in the past couple weeks is not even quite a rally. Some consider it an uninterrupted continuation of a long-term decline in value.

Placing all your bets on Greece for short-term gains in the Bitcoin market would have been a mistake, that much is for sure at this point. On the other hand, there are some highly intelligent and financially competent characters who see things exactly opposite to that and believe that there is still time to cram in Bitcoin orders before the big ascension begins. Take, for example, this recent tweet from Bitpay CEO Tony Gallippi:


Whether or not a large economic crisis can really effect the value of an asset that requires so much of the traditional financial world to on-ramp into, well, we may have to wait until the next crisis to find out. But at this point, it seems that crisis may not be the best thing to count on when shorting or going long on Bitcoin.


Bitstamp’s CEO Nejc Kodric has tweeted about their experience with user signups from Greece. Whether they are buying bitcoins or not is still a question.

bitstamp nejc kodric

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