Bitcoin Value Hits $70 and Keeps Climbing; Cyprus Bailout Connection Speculated

Bitcoin has seen a sudden and remarkable boost in value over the past few days that coincides with talks by cash-strapped Cyprus to raid their banking system in order to pay a $13 billion bailout tab—a reporter at BGR noticed that Spaniards became suddenly interested in a trio of iOS Bitcoin apps. Since the bailout fears two days ago and the resulting social unrest, Bitcoin has seen a meteoric rise from the already notably high $47 a week ago to exceed $70 today across most markets (peaking near $75 this morning on MtGox.)

Fears revolved around a raid of domestic banks and personal savings accounts—an idea that the Cypriot government rejected—however, with savings accounts on the line and the expectation of further instability down the line undoubtedly has people more than a little spooked. In these sorts of troubled times money is often siphoned out of banks and put into other currencies (or stuffed under mattresses) and Bitcoin is one such alternate currency.

In very early March, Bitcoin had already exceeded $32 USD and the value has continued to rise slowly; but two days ago that changed sharply. The value has risen by over 15% over the past two days.

Wired reporter Ian Stedman did an examination of the iOS Bitcoin apps cited by BGR’s Tero Kuittinen:

…three iOS apps — Bitcoin GoldBitcoin Ticker and Bitcoin App — each jumped up the App Store charts in Spain, all on the same day, as the news broke from Cyprus. Compare their download histories to those from a country like the UK and it’s clear that the upward trend is more pronounced in the more at-risk nation. Bitcoin Gold’s all-time high ranking of 83 in Spain came on 17 March; for Bitcoin Ticker, 68 on 17 March; Bitcoin App reached a high of 147 on 19 March. The highest rankings for those apps in the UK are lower — 293, 201 and 48 — and they were all records set months or even years ago. Indeed, there hasn’t been any kind of correlation between the Cyprus news and an uptick in Bitcoin app interest in the UK, going from this.

Duly noted is that iOS devices make up a very tiny market share in Spain and a rise in the number of Bitcoin apps being bought for them is a poor metric to really say much of anything. However, it was also noticed that on March 16 Google searches for Bitcoin in Spain spiked demonstrably. The evidence here is extremely scant, but it seems that Bitcoin evangelists and even economic analysts see it as a sign that the European troubles may be a watershed event for the Bitcoin market.

Bitcoin as an alternative currency

It’s been a long time in maturing, but Bitcoin has always been an apparent small pool and thus fears of a lack of stability have caused many to shy away from seeing it as a legitimate currency. In the early days, exchanges existed primarily to cater to a small but extremely interested market of miners, speculators, and interested parties—but from 2011 and 2012 this didn’t seem like it would be enough to stabilize the currency from sudden fluctuations.

In the passing years, the Bitcoin market has continued to grow through fits and starts, it has reached into retail and began to find ways to allow people to use Bitcoins to make exchanges without needing to store BTC long term (via payment processors such as BitPay.) Across the years it has also seen huge upsets such as the early hacking of MtGox and subsequent crashes, more hacks, and other issues to what made it feel like still a rudimentary fan-market. However, even then exchanges and the Bitcoin community were growing up.

Now Bitcoin is starting to look a lot more stable and much more real than it did two years ago.

“Bitcoin is stable enough at this point to be considered a ‘safe investment,’” said Mark Hopkins, SiliconANGLE editor-in-chief and Bitcoin enthusiast. “There’s nearly $1B in value attributed to the Bitcoin market, and a now innumerable amount of real world establishments are recorded as accepting Bitcoin as payment (in Europe and America). This trend will only continue worldwide, in my opinion. The cost of a Bitcoin won’t stop at $75 today.”

While feeling confident that Bitcoin is in a good place right now, Hopkins does warn that the price will most likely fall back down to near $60 and stabilize there, if today’s trends hold.

Of course, he also holds out some hope that Europe may indeed provide a platform for Bitcoin will be explored as an alternate currency, even if in the grim light of financial troubles:

“I watched early this morning as the stories of Cyprus’s monetary demise came in, and shocked early adopters I know from various parts of Europe talking about the viability of Bitcoin as an alternative. It seemed to be driven off some widespread reports in European media that financial analysts are suggesting that for some Europeans, Bitcoin is a safer financial vehicle right now than the Euro.”

Looking at the iOS and Android app sales, the sudden boost in Google searches related to Bitcoin—add on the sudden rise in valuation—and the next few weeks are going to be “interesting times” for the cryptocurrency.

About Kyt Dotson

Kyt Dotson is a Senior Editor at SiliconAngle and works to cover beats surrounding DevOps, security, gaming, and cutting edge technology. Before joining SiliconAngle, Kyt worked as a software engineer starting at Motorola in Q&A to eventually settle at Pets911.com where he helped build a vast database for pet adoption and a lost and found system. Kyt is a published author who writes science fiction and fantasy works that incorporate ideas from modern-day technological innovation and explore the outcome of living with those technologies.