mannerisms

Ruminations on the electronics industry from David Manners, Senior Components Editor on Electronics Weekly.

Cyprus Haircut Boosts Soaring Bitcoins

The Cyprus haircut scandal is having an amazing effect on the value of the virtual currency Bitcoin.

Before the EU proposed its infamous raid on Cypriots’ bank accounts, the Bitcoin price was $40. Now it’s $70.

It seems that Europeans, terrified of the precedent set by Cyprus that the EC can raid their private bank accounts at will, are putting their money into Bitcoins.

One of the stated reasons for founding Bitcoin was that, as a deregulated,  decentralised, non-National, digital, virtual currency it would be immune from the propensity of governments to debauch their currencies via inflation.

However Bitcoin, far from being a stable safe haven of a currency, is acting like a soaring petro-currency from a small country with huge new oil-fields.

The Bitcoin value went from parity with the US $ in March 2011, to $10 in June 2011, to $40 at the beginning of March 2013 and to $70 this week.

This week a Canadian put his house up for sale and quoted an asking price in Bitcoins.

Tags: europeans, oil fields, parity, petro, private bank accounts

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2 Comments

  1. David Manners
    March 22, 2013 17:57

    One of the attractions is the lack of traceability, (anonymous) so I’m sure thst could be true – but the size of the entire issued currency – $700 milion – is probably not enough for the drugs people who deal in billions.

  2. Anonymous
    March 22, 2013 15:27

    The main use of the Bitcoin appears to be money laundered of drug money.