Bank of America Merrill Lynch The game just changed.

Bitcoin, the bizarre electronic currency that seemingly came out of nowhere and has been taking over financial market headlines, is now being covered by one of the biggest firms on Wall Street.

"We believe Bitcoin can become a major means of payment for e-commerce and may emerge as a serious competitor to traditional money transfer providers," wrote Bank of America currency strategist David Woo in a 14-page note to clients this morning. "As a medium of exchange, Bitcoin has clear potential for growth, in our view."

This extremely volatile "cryptocurrency" crashed from $1,240 to a low of $870 this morning after the People's Bank of China announced Bitcoin coin handling restrictions for its country's banks.

Wall Street's coverage of Bitcoin seemed inevitable considering the amount of money moving in and out of it.

Here's more from Woo:

Store of wealth for the underground economy?

It has been reported that Bitcoin may help users avoid high taxes, capital controls, and confiscation. The correlation between CNY's share of volume of all Bitcoin exchanges and price of Bitcoin is high and rising (Chart 1). That said, the fact that all Bitcoin transactions are publically available and that every Bitcoin has a unique transaction history that cannot be altered may ultimately limit its use in the black market/underworld.

"Is Bitcoin a bubble?" asked Woo. "Assuming Bitcoin becomes (1) a major player in both e- commerce and money transfer and (2) a significant store of value with a reputation close to silver, our fair value analysis implies a maximum market capitalization of Bitcoin of $15bn (1BTC = 1300 USD). This suggests that the 100 fold increase in Bitcoin prices this year is at risk of running ahead of its fundamentals."

We expect other Wall Street analysts to follow suit.