Bitcoin promptly lost over 10% of its value in minutes Monday morning as news of a Greek bailout deal surfaced.
The latest financial aid package, agreed after over 17 hours of talks between Athens and its creditors, will see Greece adhere to strict financial reforms.
Bitcoin price reacts
In a post-talks conference, Eurogroup President Jeroen Dijsselbloem praised what he called Greece’s “constructive position,” while German president Angela Merkel said she thought that “trust could be regained” between Greece’s partners. Trust, however, which will be backed up by Greece’s surrendering 50 billion euros of public assets to provide insurance for the latest loans, which will be placed in a separate Athens-based fund.
Bitcoin activity, which had been riding high on speculation of a Grexit and accompanying financial fragmentation in the Eurozone, promptly reacted with panic, with Kraken currently listing as low as US$282 per coin from a high of US$311 just minutes earlier.
The capitulation of Greek President Alexis Tsipras to further austerity, a U-turn on his previous hardline stance not to continue the financial turmoil of the past five years, is expected to cause significant schisms within his party and Greek society.
Ministers refusing to ratify legislation accompanying the Eurozone austerity package were being removed at the weekend, as Tsipras attempted to reshuffle his left-wing Syriza party to set the country on a path to potentially adopt Greek creditors’ most draconian terms.
- Alexis Tsipras
Reacting to the immediate aftermath of the so-called “aGreekment,” commentators were swift to note that Greece’s future would be far from stable under the new terms.
“… just because they've reached a settlement doesn't mean everything is all better. There will be painful restrictions that potentially will make people think about Bitcoin,” a popular Reddit comment summarizing sentiment read.
Others were more pessimistic, noting Bitcoin’s recent price rally was due mostly to Greek events. “The point is, this whole rally was centered around Grexit. With Greece getting bailed out, we have no gimmick. This bull rally is over,” u/Despair_Collector wrote.
Even during the crisis’ most heated hours, however, it was notable that trading activity from Greek users remained negligible. China, on the other hand, had been fueling much of the initial activity which served to create huge speculation, other users reacting constantly to an increasing array of geopolitical triggers. Founder of BTCGreece, Thanos Marinos, told Cointelegraph:
“This is a difficult deal for both parties, the creditors and the Greek government, but it’s even more difficult for the Greek people.”
"The [key for the] Greek bitcoin market is to create the ecosystem and the Greek bitcoin foundation," continued Marinos. "And my main focus is to bring to market the best bitcoin businesses and [provide] solutions to Greek businesses that are suffering from capital controls."
He also added that he expects the capital controls to last "for at least three months."