Giorgos Chatzifotiadis sits crying outside a Greek bank. The 77 year old retired coalminer has travelled more than 40 miles in an attempt to withdraw his wife’s €120 weekly pension. This is the fourth bank he’s queued at today and has yet again been denied his money. Despair overwhelms him and he collapses, weeping. His breakdown is captured by an AFP photographer and published across the globe. Chatzifotiadis becomes the human face of the Greek crisis, representing the suffering of the average citizen, while politicians negotiate a further bailout from Europe.
The Greek debt crisis and bailout discussions have dominated news headlines over the last few months, with a strong focus on the economic implications of the various potential outcomes, speculation about an ejection of Greece from the Eurozone and the political ‘game’ of musical chairs playing out. And Bitcoin’s budding role in debt stricken Greece.
For going on a month now, after a long lull, bitcoin’s price has seen a steady increase and many are making a direct correlation between the unravelling Greek crisis and the marginal uptick. Is it possible that the likes of Chatzifotiadis and his fellow Greeks are responsible for this movement? Considering the stringent capital controls in place, lack of access to funds and as an overall cash-focused, technologically ‘behind’ nation, it’s highly unlikely.
The reality is that there are many countries with a level of debt that could quite easily land them in a similar position to Greece. Many have already, (Cyprus, for example) and their people still battle to eek out a decent living. It’s therefore far more plausible that images and stories of struggle emerging from the midst of the drama has prompted the nations of other indebted countries – most especially within the Eurozone – to scrutinise their own financial stability.
What if their country were to face the same fate? What would happen to their money? What if they landed up like Chatzifotiadis? As people explore alternatives to government-issued currency, bitcoin continues to emerge as a reliable, secure store of value. And as a result, we’re seeing a global increase in bitcoin adoption. Not as a replacement currency, but rather as a safe-haven for their finances.
With low volatility options such as jewellery (gold), property or appliances, why should financially restricted individuals consider bitcoin as a hedge for their investments?
In short: fungibility.
Should the financial floor fall out completely, you’d be hard-pressed to convince your local grocer to trade your basket of items for a luxury watch! While its inherent value may not be disputed, its usefulness at a time when cold-hard currency is required, is pretty bleak.
Bitcoin has most of the key qualities of money, but with marked advantages over the fiat variety. It’s decentralised, meaning that there is little to no risk of confiscation or freezing of funds from a central authority and is a means to circumvent capital controls. This, combined with ready accessibility, high portability and supreme divisibility, positions bitcoin as the ideal store of value when trust in local currency and government is tarnished.
To say that the recent bump in bitcoin value and adoption is coming directly from Greece is stretch. We can, however, safely say that the Greek crisis has certainly opened the eyes of most to the asphyxiating nature of government monetary policy and the latent restrictions on an individual’s financial well-being. This renewed enlightenment has led to a global interest in bitcoin as a means to secure and preserve wealth, not only at a point of crisis, but as a day-to-day investment too.
While it may be too late for the likes of Giorgos Chatzifotiadis, for those of us banking our financial future (excuse the pun) within the realms of centrally controlled institutions, perhaps there’s a lesson to be learned from a moving image of a distraught pensioner denied his livelihood by the same authorities he’s loyally trusted and served for the better part of half a century!
Photo Source: AFP