Cryptocurrency Bitcoin hits new record at $11,850

Bitcoin powered to a record high of $11,850 on Tuesday, continuing its surge from below $1,000 at the start of the year.

The cryptocurrency was last up 2 percent on the Luxembourg-based Bitstamp exchange.

Created in 2009, bitcoin uses encryption and a blockchain database that enables the fast and anonymous transfer of funds outside of a traditional centralized payment system.

It has soared more than 900 percent so far this year, posting the largest gain of all asset classes, amid increased institutional demand for crypto-currencies as financial and mainstream use has expanded.

But skeptics say it a classic speculative bubble with no relation to real financial market activity or the economy, most famously JPMorgan boss Jamie Dimon who labeled it a fraud.