How an EURO melt down will affect bitcoins?

[zby]

A complete Euro melt down looks more and more probable.

The crisis in the euro area is turning into a panic and dragging the zone into recession. The risk that the currency disintegrates within weeks is alarmingly high

from The Economist Beware of falling masonry.

I think the common wisdom is that in cases like this there is a flight to safety, risky assets are being sold and dollar rallies, but bitcoin is probably fringe enough for this to have no real effect here.  What is your opinion?

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[P4man]

I dont think it will have much of an effect. No one sees bitcoin as an alternative to euro's at this point and if the euro zone does implode, it likely means a lot less people with money to spend on risky stuff like bitcoins.

[kjlimo]

No one knows what the Euro melt down is going to do, so it's tough for use to predict how some unknown Euro melt down is going to affect bitcoin.

[Vandroiy]

LOL, take a wild guess.

It obviously affects Bitcoin. EUR is imminently endangered of a crash, USD is stupid monopoly money, Gold and Silver are bubbling as much as they can already. People are desperate for alternatives.

If the community can withstand the current pressure and keep going forward, there's no doubt we'll get a few people who see Bitcoin as a last measure to escape all the madmen.

[Gabi]

Bitcoin also dropped a lot, it's a high risk thing, people invest in it if they can afford to lose money. But if they are losing enough of it due to the crysis and the euro meltdown, i doubt they will invest in bitcoin.
Sure, there is the chance they can start use it for trading and other things

[ElectricMucus]

LOL, take a wild guess.

It obviously affects Bitcoin. EUR is imminently endangered of a crash, USD is stupid monopoly money, Gold and Silver are bubbling as much as they can already. People are desperate for alternatives.

Gold+Silver are not in bubble territory yet. Once you get a foreclosed house with a ounce of gold and a car with an once of silver we are talking.

Anyway rumor has it that several member states are already considering exit strategies. Greece and co will get kicked out which might (on the surface prolong the total collapse for another 2 years.)
Then when the time is right whats left from the Euro and the USD will collapse nearly simultaneously. PMs will spike during that periods.

Bitcoins time is the time after that when the dust has settled and people are beginning to refuse whatever crap comes out of this. (Like a UN world currency or something)

[kjlimo]

I doubt a UN world currency will be created if Euro fails.  I'm pretty sure the main reason the Euror is failing is that multiple countries with multiple fiscal policies are trying to use a single currency that needs a single fiscal policy. 

Expanding the currency to the whole world would not really solve anything. 

[evoorhees]

I'm pretty sure the main reason the Euror is failing is that multiple countries with multiple fiscal policies are trying to use a single currency that needs a single fiscal policy. 

It's failing because all the governments are bankrupt and people are realizing this.

[wobber]

If Euro melts down now (as in 2011) Bitcoin might be rallied in by some freedom-survivalist-dudes. It could make another high as people *think* they have an alternative. But will fall down hard because we have no economy to sustain it. But, if in 2012-2013 I can buy food, groceries, pay bills with bitcoin, when Euro falls, I see a huge rally, SF-style, with $50 today, 100 tomorrow and 500 the day after. Just sain'

[wobber]

Oh, and beware. If euro fails there will be a war.

[Mageant]

I've noticed that price for Bitcoin on the Euro exchanges has often been slightly higher than it should according to the USD/EUR exchange rate.

I think it's possible if it got really dramatic that it would affect the price. But it is actually quite hard to get Euros into any of the the relevant exchanges (mtgox and tradehill) without using expensive international bank transfers.

I think the ruling elites will do anything to prevent a Euro meltdown and will sacrifice the dollar if necessary to prevent it (which is already happening as the latest idea is that the Federal Reserve funds the IMF to help with the European bailouts).

[jothan]

Oh, and beware. If euro fails there will be a war.

Can you say more ? You got my attention (all 30 seconds of it) !

[BTCurious]

I think it's possible if it got really dramatic that it would affect the price. But it is actually quite hard to get Euros into any of the the relevant exchanges (mtgox and tradehill) without using expensive international bank transfers.

This seems to be the case, yes. It's a hassle. Takes a long time, too.

As a European, I'm much more worried about how an EURO melt down will affect me. I have no idea how that works, and I'm considering investing more in bitcoins, but I can't really justify that to myself with the high risk, and the mental bookmark that my outlook on bitcoin is skewed due to me being immersed in it…

Btw: That's an actual question. If someone has any idea what's going to happen, then let me know

[netrin]

Jothan, Read up on your European history, financial and political, between world wars I and II.

I don't believe a euro collapse would negatively effect bitcoin value, thus I think $/bitcoin would sky-rocket.

BTCurious, in my experience Europeans are generally averse to physical metals, but are moving money into dollars (banks are reporting record withdrawls). You might consider stocking up on food and petrol. You can't go wrong if it's a false alarm.

Withdrawal from the European Union is a right of European Union (EU) member states under TEU Article 50: "Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements." No state has ever withdrawn, though some dependent territories or semi-autonomous areas have left. Of these, only Greenland has explicitly voted to leave, departing from the EU's predecessor, the European Economic Community (EEC), in 1985.

Yeah baby. What foresight!

[BadBear]

No effect.  People aren't gonna turn to bitcoins after whats happened to it. 

[old_engineer]

I'm pretty sure the main reason the Euror is failing is that multiple countries with multiple fiscal policies are trying to use a single currency that needs a single fiscal policy. 

This!  Europe just isn't homogenous enough to support a single currency as there is little cross-border movement of labor or capital.   How many people would actually move from Greece to Germany for work, as traditional economics would dictate?  I can't find any numbers, but with a different climate, culture, and language, and the unlikeliness of friends or family in Germany, I just don't see many Greeks relocating.  Though it's a big change to move from Florida to New York, it's still common.

America's "secret" advantage has been that it was able to exterminate the indigenous population, forcibly drive out the Spanish and Russians, and colonize a huge landmass with everyone primarily using a single language.   The language barrier between English and Spanish is far less than between Greek and German.

As far as what this means for bitcoin, I'm with P4man: less Euro play money to spend on novelties like btc.

However, if the Drachma makes a comeback, I'd expect Bitcoin to do well in the Greek zone as a hedge against devaluation of both the Euro and Drachma.
There's evidence that countries that have experienced overnight currency devaluations are more likely to take up bitcoins, such as Ukraine and Bulgaria:



(from http://www.thebitcointrader.com/2011_10_01_archive.html )

BTCurious, I think your best bet is to diversify diversity diversify.  My thought would be 25% cash, 25% bank euro, 25% bank USD, 25% bitcoin.  If one or two fail, you won't be wiped out, and if USD or BTC shoot up relative EUR, you might come out ahead.
But also, keep in mind that currency "failure" is a loose term: if EUR drops by 50% vs. USD, people will consider it to have "failed", but it will still be useful paper to own.

[wobber]

BTCurious, in my experience Europeans are generally averse to physical metals, but are moving money into dollars (banks are already reporting record withdrawls). You might consider stocking up on food and petrol. You can't go wrong if it's a false alarm.

The best thing you can invest in is INDEPENDENCE. In knowledge, growing your own food, producing own energy, thinking without ait, being prepared for the worse.

I don't wanna sound like a conspiracy-guy but I also believe there is a possibility that someday some powers will stage a false-flage alien attack. The frame is already in place, greyish aliens that kidnap people and cows, lot's of alien invasion movies. They need just some fancy technology and some casualties. Actually there is a fear-frame for everything: economic collapse, nuclear wars, pandemics, running low on resources. And since most are already afraid and framed-in, the only thing I need is to wait for sunset and flashlight my face to scare the shit out of people.

On the other hand, if one is independent and thinks for it's own, how hard will be to scare him with "OMG, NO FOOD THIS YEAR". He'll just work harder to produce more. See the tribes people. What fears do they have, other than their gods and Earth's creatures?

[netrin]

I don't wanna sound like a conspiracy-guy but I also believe there is a possibility that someday some powers will stage a false-flage alien attack. The frame is already in place, greyish aliens that kidnap people and cows, lot's of alien invasion movies. They need just some fancy technology and some casualties.

Paul? Is that you?

[old_engineer]

I don't wanna sound like a conspiracy-guy but I also believe there is a possibility that someday some powers will stage a false-flage alien attack. The frame is already in place, greyish aliens that kidnap people and cows, lot's of alien invasion movies.

Can't tell if troll or serious, but leaning troll.  Where can I bet on conspiracy theories?  Oh wait, conspiracy theories are _designed_ around available data, and hence can never be disproved with available data, so the bet could never be settled. 

[wareen]

No effect.  People aren't gonna turn to bitcoins after whats happened to it. 

Some would for sure, the price would rise and draw others in - we'd probably see the next bubble.

Another sure consequence is that with a hypothetical return of national currencies in Europe, Bitcoin would immediately gain usefulness.