After several days of heavy losses, bitcoin and its rival cryptocurrency units rallied strongly on Wednesday following some surprisingly optimistic comments from US regulators.
In a hearing before the US Senate Banking Committee, the chairmen of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) offered their opinions on the long-term future of digital currencies, the blockchain technology that supports them, and how they should be regulated.
SEC chief Jay Clayton (left) appeared reluctant to see past the question of value and concerns over fraud and criminality.
Bitcoin futures applauded
Christopher Giancarlo, his peer at the CFTC, however, was much more upbeat and defended the mining process - saying it represented value. He also defended the bitcoin futures market.
Giancarlo (below) said: "“The CFTC can now obtain trading data and analyse it for fraud and manipulation.
"With Bitcoin futures we’re now having visibility into underlying markets and spot markets that we would not otherwise have."
Clayton focused on the practical use of digital currencies, saying volatility made transactions too difficult.
"I look at this from the perspective of Main Street investors, and they should understand that," he said.
But both remained concerned about unregulated cryptocurrency exchanges and called for a co-ordinated regulatory approach among the US states and the main agencies - including the SEC and CFTC - to address consumers' needs.