Bitcoin Mania

Bitcoin Gets a Boost From Euro Crisis

The fledgling digital currency Bitcoin is probably safer than that flimsy currency backed by an entire continent, some traders figger.
euro flower pots Bitcoin Gets a Boost From Euro Crisis

(Photo: Flickr.com/Images_of_Money)

The FBI recently estimated that after three years, the Bitcoin economy is worth at least $35 million. Thanks to the uncertainty surrounding certain government currencies, it may soon be worth more. The Financial Post reports that fear over the value of the euro, strained by potential government insolvency in Greece and Spain, has led to a significant uptick in euro-for-Bitcoin trading.

Given the cyberattack last month in which thieves made off with $90,000 in Bitcoins–that’s €71,738 euros, by the way–one would think another currency might be a better place to park your cash. However, some are scrambling to turn their euros into Bitcoins. Charlie Shrem, the Brooklyn-based founder of the Bitcoin transaction service BitInstant, claims potential customers are desperate to mail him euros. “European volume has been skyrocketing,” he told the Post.

More euros changed hands on Bitcoin exchanges over the past week than in any week in Bitcoin’s history, according to the blog Bitcoin Money.

Data from the Bitcoin exchange Mt. Gox shows a significant increase in the volume of euros traded over the last month, when the price of Bitcoin in euros increased by roughly 15 percent. The euro is the second-most traded currency in the Bitcoin markets, accounting for 9 percent of transactions, followed by the British pound sterling (8 percent) and the Second Life Linden dollar (5 percent). The U.S. dollar still dominates, accounting for 72 percent of trading.

Traders on foreign currency exchanges had more faith in the euro, which has suffered from volatility but had been on a three-week high against the U.S. dollar.

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