Bitcoin is booming today after the US Senate discussed the possible introduction of new laws to combat the volatility of cryptocurrency and stop digital currencies from being used by scammers and terrorists.
This morning, the price of Bitcoin soared by almost a third and all the other major cryptocurrencies also showed price growth too.
The price of one Bitcoin is now sitting at just under $8,000 (£5,744) after skyrocketing from a low yesterday of just over $6,000 (£4,308).
The surge may have been prompted by a US Senate hearing on virtual currencies in which Jay Clayton, chairman at the Securities and Exchange Commission (SEC), said: ‘We may be back with our friends from Treasury and the Fed to ask for additional legislation.’
If America imposes strict new rules on the trading of Bitoin – but doesn’t ban it outright – it would make the notoriously wild and unruly cryptocurrency markets more stable.
New laws would make virtual coins more attractive to investors, particularly if they reduce volatility which causes the price to of cryptocurrencies to fluctuate wildly.
Other digital currencies also rose after posting steep losses in the last few weeks. Ethereum, the second-largest by market value, was up 10.7 percent over the past 24 hours at $791.33, while the third-largest, Ripple, edged up nearly 6 percent at 76 U.S. cents, according to cryptocurrency tracker coinmarketcap.com.
The gains mark a sharp change in fortunes. Yesterday, the price of Bitcoin reached its lowest point since November after a dramatic collapse dubbed the ‘cryptopocalypse’.
Senator Mike Crapo, the Republican chairman of the panel, and Democratic Senator Sherrod Brown were among the lawmakers to express worries about volatility, investor protections and the risks posed by cybercriminals in the virtual currency market.
‘Between the enforcement actions brought by your agencies, the hack of the international Coincheck exchange…there is no shortage of examples that increase investor concerns,’ Crapo said, referring to hackers’ recent theft of $530 million from Japanese bitcoin exchange Coincheck.
Federal legislation could help to clarify which government agency has the authority to police the underlying virtual currency cash market, the regulators said.
Christopher Giancarlo, chairman of the Commodity Futures Trading Commission, said: ‘As word is getting out that we will go after misconduct I think you’re starting to see that reflected in the price of Bitcoin.’
The cryptocurrency markets are notoriously sensitive about government legislation, with calls for bans on certain aspects of trading prompting huge crashse in the value of Bitcoin and alt-coins.
But it appears that the possibility of US laws to regulate markets so they protect users has reassured investors.
China recently set out ban plans which could stop most of its citizens trading in Bitcoin and other cryptocurrencies.
Washington does not appear to show an appetite for a ban.
After all, if there’s one thing America knows how to do, it’s making a lot of money. And there’s a lot of cash to be made in the brave new world of cryptocurrencies.