Amidst the news that the Department of Justice and the Securities and Exchange Commission told a U.S. Senate committee that Bitcoins are legitimate financial instruments, Bitcoin’s prices spiked more than $275 in yesterday’s trading on the Mt.Gox. Whereas the highest Bitcoin price touched the benchmark of $900, the last price that the Bitcoin exchange is selling the digital currency was $780.
Bitcoin fell slightly for some time to $531 but rallied again. The unprecedented growth in Bitcoin’s prices has taken aback many market observers who believe that it may not last.
Just six weeks ago, Bitcoin’s prices were hovering around $150 apiece and the instant increase the prices on the Monday going above $600 make it one of the best investment options.
Whereas at one end Bitcoin’s prices are soaring high, the confusion surrounding it has attributes both of a currency and a speculative investment, is prompting the U.S. authorities to weigh in on its legitimacy. The currency rally in Bitcoin can be attributed to several factors; it may be due to presumed scarcity or even from an overzealous investor class.
Bitcoins are a Legitimate Financial Instrument Says the Justice Department
After yesterday’s meeting the Department of Justice and the Securities and Exchange Commission told a U.S. Senate committee that Bitcoins are legitimate financial instruments. The statement has brought in confidence among Bitcoiners who were expecting an onslaught on it. They will be pleasantly surprised that the decision may boost prospects for wider acceptance of the digital currency.
In its statement the Justice Department said that it told Congress that Bitcoin and all electronic payment technologies have benefits for consumers. However, at the same time the department has sought after ways to root out any illicit transactions made in Bitcoin. On the other hand, the Securities and Exchange Commission has suggested that Bitcoins may likely meet the definition of securities.
The assertion from the Securities and Exchange Commission means a lot for Bitcoin as it can lead to its regulation by the body. The bright aspect of the yesterday’s meeting was that representatives from the agencies told the U.S. Senate Committee on Homeland Security and Governmental Affairs that the digital money like Bitcoin offers tremendous benefits to customers.
However, in their addenda they say that digital currencies like Bitcoin carries risks that can be associated with any other online-payment system.
To contact the reporter of this story: Deepak Tiwari at firstname.lastname@example.org