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Bitcoin Closes Week At All-Time Highs, as U.S. Senate to Hold Hearings on “Virtual Currencies”

November 9, 2013 at 1:05 by BitcoinNews

Bitcoin prices climbed to another record all-time high of $337.79 on the BitStamp online exchange. Mt. Gox, meanwhile, which still has the highest bitcoin prices, is also at an all-time high of $364.87. another record high of $358 today. Nonetheless, Mt. Gox continues to struggle with claims that it does not process withdrawals.

As reported in Bloomberg Businessweek, the price of Bitcoin has more than doubled after the closing five weeks ago of the “Silk Road”, while the U.S. Senate set a hearing for November 18 to discuss the future of the digital money and other virtual currencies has set the date of it hearing on “virtual currencies”.

The publicity generated by the “Silk Road” had a lot to do with the conflation of the illicit website with Bitcoin itself, even though Bitcoin is wholly separate. Few would blame the U.S. dollar itself for the bulk of illicit drug sales, even if paper cash continues to be, and has for quite a long time been the preferred medium of exchange.

Nevertheless, the “Silk Road” seems to continue to have outsized influence even after its demise, as the hearing is titled “Beyond Silk Road: Potential Risks, Threats, and Promises of Virtual Currencies.”

Additionally, the Federal Reserve has already weighed in on the digital currency. In a December 2013 report published this week by the Federal Reserve Bank of Chicago titled “Bitcoin: A Primer” provided yet another, but welcome, introduction to the digital currency, noting that there are about 30 transactions per minute, at an average amount of 16 Bitcoins.

François R. Velde, senior economist at the Fed, noted in the report’s conclusion that:

Should bitcoin become widely accepted, it is unlikely that it will remain free of government intervention, if only because the governance of the bitcoin code and network is opaque and vulnerable. That said, it represents a remarkable conceptual and technical achievement, which may well be used by existing financial institutions (which could issue their own bitcoins) or even by governments themselves.

With the all-time high, Digg Founder Kevin Rose tweeted that he’s out of his bitcoin today, seeing too much greed in the market, a move he saw as akin to Buffett’s value investing strategy. Time will tell if his move is prescient of a decline or foolishly early in a market starting to look a bit frothy, if not bubbly.

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