A month ago you could buy a bitcoin from Mt.Gox for under $200. Last week, it would have cost you around $400. At press time today, that same bitcoin costs about $670. What’s going on? Why would any use so volatile a currency?

Alternatively, the Dow Jones Industrial Average topped 16,000 for the first time today, and the Standard & Poor’s 500 crossed the 1,800 threshold. Is bitcoin simply following the trend of the greater economy?

It seems clear that, particularly in the past week, the value of a bitcoin is surging ahead at its own pace. This could be due to demand growing in China, where the largest bitcoin exchange is located, or is a result of speculators gaming the currency ahead of hearings on the currency in front of the Senate Committee on Homeland Security & Governmental Affairs today and the Senate Committee on Banking, Housing & Urban Affairs tomorrow. Whatever the reason, demand for bitcoins has never been greater. The exchange Coinbase is out of coins until Friday, according to Forbes.

Here’s a look at the last 30 days of bitcoin prices as determined by blockchain.info:

Now, this is a nice graph, if you’ve owned bitcoins for a while. But with all this volatility, how can bitcoins be considered a viable medium of exchange?

Nick Holland, senior payments analyst for Javelin Strategy & Research, pointed to the energy around bitcoins as a legitimizing factor.

“Certainly, its value is disproportionate to the ways you can use it,” Holland said. “It’s legitimizing in that it’s crossed the chasm into the real world.”

Holland pointed out that Mt.Gox and other exchanges are following KYC requirements, and said the upcoming hearings on Capitol Hill are, as he characterized them, “sympathetic” to the math-based currency.

“It’s early days, but it’s starting to look a lot like a legitimate currency,” Holland said. “Using it as currency has its difficulties, but it has use cases in P2P payments and international remittances.”

Maybe so, but we’re not using our bitcoins to buy coffee until things settle down a bit.