Bitcoin Revisits $300-Plus Territory as Greece Grapples With Stringent Bailout Plans

The price of Bitcoin, which has languished under $300 for more than six months, briefly shot past that milestone over the weekend, only to close lower in trading later Sunday.

The digital currency, which traded well over $600 a year ago before beginning a slide that saw it plunge below $300 and stay there, may be reacting to the debt crisis in Greece, some observers say. A week ago, Greek voters overwhelmingly rejected a bailout plan many saw as onerous, a move that could have driven Greeks to buy Bitcoin as a hedge against a possible exit from the Eurozone and its cross-national currency, the euro. That buying binge, so the theory goes, drove up Bitcoin’s price.

But other sources aren’t so sure. One online news service that follows Bitcoin figures what’s driving the price isn’t so much Greeks buying the currency now, though some surely are, but rather the expectation by buyers around the world that more Greeks will plow their euros into it in coming weeks.

Buyers are betting the current scenario may turn into a repeat of the situation in Cyprus several years ago, when binge-buying of Bitcoin in the face of that island nation’s financial crisis quintupled its price. But price rises built on hype and speculation aren’t sustainable, the service warns.

Indeed, Bitcoin is now treading familiar territory again, trading just shy of $287 at mid-morning Monday.

If the economic drama in Greece is driving Bitcoin’s price to any extent, that drop could reflect buyer sentiment in the face of a possible bailout plan proposed by Greece’s creditors, led by Germany, albeit on terms more burdensome than those rejected in last week’s referendum.

Greece’s government appears to be open to some variant of the plan, a move that may confuse Greek voters but also put a damper on any Bitcoin trading based on possible disruptions stemming from a Greek exit from the euro. The Eurozone estimates a bailout will require 86 billion euros ($96.3 billion at the current rate of exchange), though the Greek government says the number is more like 53.3 billion euros ($59.7 billion).

Much depends on what happens in the coming weeks. Greece needs 7 billion euros ($7.8 billion) to meet a debt payment due July 20 and another 5 billion euros ($5.6 billion) next month.