Yesterday the US Senate Committee on Homeland Security and Governmental Affairs held a hearing on virtual currencies. The hearing was largely perceived to be a positive development for Bitcoin and other virtual currencies. While there was discussion of illicit use of Bitcoin there was also considerable discussion of the potential economic benefit of the currency. Additionally several officials testified to the legality of Bitcoin which has helped to solidify confidence in the growing internet based currency. The full video is available here.
In addition to testimonies from the Department of Justice, Secret Service, and Fincen several industry leaders from different virtual currency groups were invited to testify. They reiterated the potential economic gain from Bitcoin as well as the mass technological potential that the currency offers.
Senator Carper, the chair of the committee, is likely to gain a bit of a fanbase from the Bitcoin community. By comparing virtual currency to the early days of the internet Senator Carper has taken a position of cautious optimism. Meanwhile Bitcoin related memes are popping up related to the hearings. See Good Guy Tom Carper below.
Of what significance are these memes? Well for one they indicate the growing size of communities like the Bitcoin subreddit which previously have shunned the often comedic images. These memes indicate a new audience is migrating to Bitcoin and virtual currencies and could be viewed as another indicator of growth, regardless of your thoughts on the memes themselves.
In the aftermath of the hearings Bitcoin has seen huge price fluctuations. At one point last night BTCChina.com, China’s largest Bitcoin exchange, was trading at well over 6000 CNY and over the equivalent of $1000 USD. BTCChina also announced that they raised over $5 million USD in investment capital yesterday which helped to fuel the price on the exchange. Meanwhile another major exchange, Bitstamp.net, has seen a several hundred dollar range in price and is currently down from what appears to be either too much traffic or possibly a DDOS attack.
With Bitcoin being seen as more legitimate, volume on exchanges increasing, and regularly topping Google Trends, we’re likely in for a wild ride with Bitcoin in the coming days, weeks, and possibly even months.