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Bitcoin is in high demand right now -- each bitcoin currently sells for more than $90 U.S. dollars -- which bitcoin insiders say is because of world events that have shaken confidence in government-issued currencies.
“Because of what's going on in Cyprus and Europe, people are trying to pull their money out of banks there,” Tony Gallippi, the CEO “BitPay.com,” which enables businesses to easily accept bitcoins as payment, told FoxNews.com.
Digital 'bitcoin' currency surpasses 20 national currencies in value
The online alternative currency, previously little more than a curiosity in financial markets since its 2009 inception, has zoomed in trading value since the Cyprus banking crisis erupted two weeks ago.
With fears spreading that even insured deposits might not be safe in similar nations hit by banking crises, those looking for a haven to store their wealth have fled to the complicated world of digital cash.
"Incremental demand for bitcoin is coming from the geographic areas most affected by the Cypriot financial crisis—individuals in countries like Greece or Spain, worried that they will be next to feel the threat of deposit taxes," Nicholas Colas, chief market strategist at ConvergEx, said in a report on the startling trend.
Bitcoin Bonanza: Cyprus Crisis Boosts Digital Dollars
Currency markets are keeping close track of Cyprus' banking crisis and are braced for possible repercussions, but one currency has thrived in the chaos and zoomed in value -- Bitcoins.A Bitcoin is a digital currency that is traded electronically and does not need government backing. Despite its name, there is no coin to put in your pocket.Two weeks ago, one Bitcoin was worth $40, then a record high.
Today, it's worth $72, largely because of "incremental interest" from euro and Russian ruble holders who are terrified by the situation in Cyprus, said Nicholas Colas, chief market strategist at ConvergEx Group, a financial technology company in Manhattan. "The best-performing currency year-to-date has no home country, no central banker and no physical scrip," Colas said.
Cyprus Crisis Boosting Unique Currency, the Bitcoin
You may not have heard of it, but Bitcoin is currently the best-performing currency in the world and the first to be traded online without any kind of central bank or institutional supervision.
One Bitcoin is now is currently worth more than $70 (£46). About a week ago, it was worth some $45, a record high since it was first invented in 2009.
Its value has been driven up by the debt crisis in Cyprus, where banks have been shut for more than a week. There are about 10 million Bitcoins in circulation right now and that by mid 2030 there will be about 25 million
Bitcoin popularity 'boosted by euro'
One of the most interesting side notes from the Cyprus bailout drama has been the sudden return to prominence of virtual currency Bitcoin after its fifteen minutes of fame in 2011.
In Cyprus, a combination of banking system volatility, strict capital controls and a dramatic loss of confidence in bank deposit insurance created almost perfect conditions for a Bitcoin comeback. In the last two weeks, the value of a single Bitcoin has exploded in value, from $40 to nearly $75 over the course of roughly two weeks, as depositors in Cyprus searched desperately for a way to keep their money from being confiscated during a bank bailout.
Why reports of Bitcoin’s death may have been greatly exaggerated
One of the oddest bits of news to emerge from the economic collapse of Cyprus is a corresponding rise in the value of Bitcoin, the Internet’s favorite, media-friendly, anarchist crypto-currency. In Spain, Google (GOOG) searches for “Bitcoin” and downloads of Bitcoin apps soared.
The value of a Bitcoin went up to $78. Someone put out a press release promising a Bitcoin ATM in Cyprus. Far away, in Canada, a man said he’d sell his house for BTC5,362.
Bitcoin May Be the Global Economy's Last Safe Haven
Forget gold. The hot investment during this time of economic uncertainty in Europe appears to be Bitcoin.
Earlier this month, the peer-to-peer virtual currency was trading at a record $40 for one Bitcoin, more than doubling its value since January, when it was languishing in the midteens. In the past three weeks, it has doubled again, trading as high as $95 today.
All told, it's an increase of nearly 350 percent in the past two months, and much of it is because of the banking crisis in Cyprus.
Bitcoin "is clearly having a breakthrough moment here, and a deeply surprising one given its novelty and nascent infrastructure," Nicholas Colas, chief market strategist at financial technology company ConvergEx Group, wrote in a recent research note.
Bitcoin hits record exchange values with Cyprus banking crisis
For a currency that hardly anybody understands, Bitcoin is a hugely popular and highly valued way of buying and selling. It is a form of Internet money that can be used to make purchases online, and some companies exclusively accept Bitcoins. In fact, it's so big that the value of "all outstanding Bitcoins" just hit $1 billion because of the recent banking instability in Cyprus.
How is virtual currency with no physical manifestation suddenly worth $1 billion in U.S. currency? Though it doesn't hold a candle to the $1.13 trillion in Federal Reserve Notes in circulation, Bitcoin is gaining traction (and attention).
What Is Bitcoin, The Newest $1 Billion Currency?