Bitcoin momentarily reached $US900.

Just as soon, it fell back to $US583.

Now it is at $US650.

Bitcoin got two major lifts. First, Ben Bernanke submitted a letter to the Senate saying digital currencies like Bitcoin “may hold major promise.”

Then this afternoon, the Senate held its first hearing on the state of digital currencies and whether they pose a threat to consumers. The answer was basically “no,” and Bitcoin traders regarded the prospect that it could become more mainstream as bullish.

Finally, the FT’s Izabella Kaminska suggested something slightly more bizarre may be afoot: that a cartel of souped-up Bitcoin miners had taken control of creating new Bitcoins, which are produced by computers solving complex maths equations, and that more “conventional” miners need the price to move higher to justify the cost of their investment.

Just 36 hours ago, Bitcoin was at $US500. This is getting crazy.

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