On Monday, representatives from the Department of Justice and Securities and Exchange Commission told the U.S. Senate Committee on Homeland Security that Bitcoins, the controversial digital security, are in fact legitimate financial tools.
There are over 12 million Bitcoins in circulation with a market value of almost $6.55 billion, according to bitcoincharts.com. At that market value, Bitcoins in circulation are worth almost 50% more than Yelp (NYSE: YELP).
In anticipation of the Monday’s hearings, Bitcoin surged 25% to $619 on Monday afternoon. On Nov. 14, the digital currency traversed $400 for the first time, marking a quadruple in just 90 days.
The digital currency’s rapid appreciation combined with verbiage from regulators that appears to legitimize the currency’s utility could mean the idea of a Bitcoin exchange traded fund is not as fanciful as previously thought.
Earlier this year, the Winklevoss twins of Facebook (NasdaqGM: FB) fame, filed plans with the Securities and Exchange Commission for the Winklevoss Bitcoin Trust. At the time, the filing did not include a ticker, expense ratio or possible release date, indicating that a launch date was not imminent. [Bitcoin ETF may Become a Reality]
The idea of a Bitcoin ETF initially had its detractors because of the currency’s opaque and unregulated market. However, the SEC acknowledged Bitcoins can be considered currencies and therefore would fall under that agency’s regulatory purview. [Bitcoin ETF: How Crazy of an Idea is It?]
“The vision of the exchange traded product is to create a simple solution to the problem of buying Bitcoins if you don’t want to purchase and store them,” said Tyler Winklevoss in a telephone interview with ETF Trends in July.
Some investors probably wish a Bitcoin ETF was available in January when the currency traded below $14. At this writing Monday afternoon the Bitcoin/U.S. dollar pair (BTC/USD) traded around $658.
BTC/USD
