Bitcoin has rocketed to a lifetime high just shy of $US16,000 ($A22,400) after climbing some 60 per cent over one week, intensifying the debate about whether the cryptocurrency is in a bubble about to burst.
The largest US cryptocurrency exchange struggled to keep up with record traffic as the price surged, with an upcoming launch of the first bitcoin futures contract further fueling investor interest.
Proponents say bitcoin is a good medium of exchange and a way to store value, much like a precious metal. They also argue it is preferable to traditional currencies because it is not subject to central bank manipulation.
The supply of bitcoin will eventually be capped at 21 million, and some 16.7 million have already been released.
But critics say that the price run-up is a bubble that has been driven mostly by speculation, leaving bitcoin vulnerable to a sharp reversal. JPMorgan Chase & Co Chief Executive Jamie Dimon famously called bitcoin a fraud in September.
"Bitcoin remains a major gamble as it is very much an asset that remains in uncharted waters, we've simply not experienced this before," said Nigel Green, founder and chief executive of deVere Group.
"Also, an asset that goes almost vertically up should typically raise alarm bells for investors," he added.
The world's biggest cryptocurrency has surged fifteen-fold in value so far this year.
The latest move brought its so-called market cap, its price multiplied by the number of bitcoins in circulation, to nearly $US280 billion, according to Coinmarketcap, a trade website. By comparison, the market value of Wal-Mart Stores Inc is around $288 billion.
Analysts said the launch slated for this weekend of bitcoin futures by Cboe Global Markets Inc's Cboe Futures Exchange, one of the world's biggest derivatives exchanges, was helping drive up the price on expectations it would draw more investors to the market.
The CME Group will launch bitcoin futures one week later, while Nasdaq Inc plans to get into the mix next year.
