Bitcoin Enjoys Rally As Greek Crisis Deepens

Virtual currency Bitcoin has seen a rally as the Greek financial crisis has deepened.

Capital controls took effect in Greece earlier this month, restricting bank withdrawals to just €60 (£42).

There are concerns that deposits could be subjected to a haircut of up to 30%, while others fear a forced conversion to the drachma would lead to similarly negative consequences.

The price of Bitcoin stood at $223 on 8 June, but had increased 20% to $271 by Monday.

The digital currency is not controlled by the central bank of any national government, and payment can be made directly to another person without using an intermediary such as a bank.Virtual currency Bitcoin has seen a rally as the Greek financial crisis has deepened.

Capital controls took effect in Greece earlier this month, restricting bank withdrawals to just €60 (£42).

There are concerns that deposits could be subjected to a haircut of up to 30%, while others fear a forced conversion to the drachma would lead to similarly negative consequences.

The price of Bitcoin stood at $223 on 8 June, but had increased 20% to $271 by Monday.

The digital currency is not controlled by the central bank of any national government, and payment can be made directly to another person without using an intermediary such as a bank.But other users pointed out to the volatility of Bitcoin, which sees rapid price fluctuations on a weekly basis.

One user, called 'bontchev', said: "The average Greek will have to decide: bet on cryptotokens that have demonstrated their ability to fall by 80% in a year, or bet on euros that haven't done so yet?"

The current Bitcoin value of $271 is still far lower than its peak of $979, reached in November 2013.Yanis Varoufakis, who quit as Greek finance minister on Monday, has previously written about Bitcoin, calling it a "flawed currency blueprint"