Quote from: BitcoinAshley on July 04, 2013, 04:07:42 PM

Quote from: Kaiji on July 04, 2013, 02:59:25 PM

I never understood how the last bitcoin bubble was caused by the Cyprus crisis. Is it known fact or just an assumption? With the blocking of withdrawals in the banks in Cyprus how were they able to put money into bitcoin exchanges in the first place? Or were Cypriots more tech savvy than other countries and saving their wealth in bitcoins just an easy step?

The cyprus-news-induced portion of the bubble did not come from Cypriots (for the most part.) There were indeed some cypriot holders of bitcoins, and some Cypriots started investing in bitcoins. One exchange even had a special discount rate for Cypriots. But there was no "bitcoin boom" in Cyprus like we may have hoped. The vast majority of the funds responsible for the "cyprus-news-induced" portion of the bubble came from others in Europe (either scared that the same would happen to them, or speculating that others would buy on this fear) and elsewhere in the world.

Keep in mind that even with a $266 to, say, $80 pop, after buying at $266, you still have a better (albeit negative) ROI than a Cypriot business with $800,000 operating capital that had $700,000 taken off for the bail-in. So people criticizing BTC for its volatility may not quite realize the true risk of a bail-in. In the end, holding cash is superior to both in the short-term; that's undeniable. But holding BTC means that in many cases, you can pay some invoices and bills online instantly, so it's more acceptable for operating cpaital. There are pros and cons. Most people simply aren't interested in the volatility. But soon, they will learn Grin

Just remember all the people saying "Oh, that would never happen here..." Those are the people you get to laugh at when their livelihoods are ruined and their families are living on the street, and their 16 year old daughters are selling their bodies for 5 euros on an Athens street corner.

So basically what happens in one EU country can happen in another. They probably saw Cyprus as a test case for taxing people's savings and now they see that they can get away with it other countries will face the same thing. That fear might have caused Europeans to save their wealth in bitcoins.