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Cyprus Crisis Increases Flight to Bitcoins

Mar 22, 2013

Bitcoins are growing in popularity on Cyprus
Cyprus Bitcoins

The desire for gaming and gambling drives smartphone and tablet sales, and vice versa.

Various instruments and means of exchange that present alternatives to a risky currency tend to rise in popularity during times of financial crises. While some people start hoarding gold, others raid the supermarket shelves for food to store.

Then there are those, who acquire Bitcoins.

It appears that the crisis in Cyprus and the EU demand to skim the deposits held at the country’s banks has caused citizens of some other unstable countries, especially Spain, to re-evaluate the security of their own bank accounts.

As a consequence of that re-evaluation many of them are transferring their “real” money (actually, electronic data in the bank) to this revolutionary virtual currency. This is attested in part by the jump of Bitcoin applications to prominent places on the download charts.

Clearly, a virtual currency with no single physical presence, on which no government can levy taxes, carries a definite attraction these days, especially in countries whose economies are in a less than perfect shape.

The cloud-type file-sharing mechanisms behind Bitcoin are rather complex, but the user experience is generally smooth and the currency’s usability is becoming greatly diversified. There is therefore a strong pull to join, on top of the push that was created by the situation in Cyprus.

A host of vendors also accept payments made in Bitcoins and recently a Canadian man has started selling his entire house for this virtual, peer-to-peer currency. But a major area driving popularity (and price) of Bitcoins upwards is online and mobile casino gambling.

Companies like SatoshiDice and bitZino, for example, specialize in offering games for this consensus-currency, thereby removing the need to consider gambling laws in most countries while still making a profit. The latter company, bitZino is actually a classic internet gambling operator, with online blackjack, craps, and roulette on offer – but all of it for Bitcoins, which do not officially qualify as money.

Another significant development that could have led to this surge in demand for Bitcoins observed over the past couple of days may have been the decision earlier this month by iPoker’s skin, to add the cloud currency among its deposit and withdrawal options.

Considering these gambling trends it is possible that the events in Cyprus merely served as a catalyst for some people to start working on smart strategies to achieve financial security, but the main driver may still be the increasing availability of gambling destinations accepting Bitcoins.

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