Bitcoin surged more than 8 percent at one point on Tuesday to a record, breaking above $2,900.
The digital currency hit a high of $2,967.48 earlier in the session before giving back some gains to trade at $2,779.67, according to CoinDesk. The cryptocurrency came off its record shortly after Mark Cuban said it was in a bubble.
The Bitcoin Investment Trust (GBTC) fund, which tracks bitcoin, rose 3.3 percent and traded record highs.
Ethereum, an alternative cryptocurrency to bitcoin, also rose on Tuesday, advancing nearly 3 percent to build on Monday’s record-setting session and its massive year-to-date gains.
Bitcoin has also had a stellar year, rising nearly 200 percent, easily outperforming stock market benchmarks like the S&P 500 and the Nasdaq composite in 2017. Entering Tuesday’s session, the S&P and Nasdaq had risen 8.81 percent and 16.9 percent for the year, respectively.
Bitcoin in 2017
Sean Walsh, a partner at Redwood City Ventures, which invests in bitcoin and blockchain companies, said in a note that bitcoin’s price should continue rising.
“It may sound like hyperbole, but I simply cannot emphasize enough how mismatched the quantity of whole Bitcoins and the population of potential global buyers is. Bitcoin is available for purchase to 3 Billion Internet-connected adults across every country in the world,” Walsh said. “We produce just 1 new Bitcoin each month for 55,000 of these people to fight over.”
Brian Kelly, CEO and founder of BKCM and a CNBC contributor, echoed Walsh’s comments in an email. “We are in the first years of what is likely to be a multi-year bull market. Of course there will be corrections and even crashes along the way, but bitcoin is here to stay.”
In fact, the bitcoin performance has come with greater volatility. On May 25, it plunged more than $300 after skyrocketing more than 12 percent in that session.
A contributing factor to bitcoin’s recent surge is growing demand from Asia, especially in Japan. Japanese interest has risen ever since the government approved bitcoin as a legal payment method in April.
Investors also plowed more money into the currency after Minneapolis Federal Reserve President Neel Kashkari commented on the blockchain technology behind bitcoin, saying it “has more potential than bitcoin itself.”
Blockchain is a record of transactions and historical value categorized into blocks by a network of computers. The technology has spurred the recent creation of other digital currencies.
—CNBC’s Evelyn Cheng contributed to this report.
WATCH: Here are three big risks to the bitcoin rally: Trader