Investing.com - Bitcoin was hovering below record highs on Wednesday, after rising above the $8,000 level for the first time in its nine-year history on Monday, adding to fears over an asset bubble.
On the U.S.-based Bitfinex exchange, Bitcoin was at $8,270.90 by 08:02 AM ET (01:02 PM GMT).
On Tuesday, it hit $8,310.20, the highest level in its nine-year history, before falling more than $400 and then rebounding after the $31 million theft of cryptocurrency tether revived concerns over the security of digital currencies.
Bitcoin, which is known for sharp swings, has tended to rebound quickly from pullbacks.
Bitcoin has risen more than 700% in volatile trade this year, with three separate corrections of more than 25% all giving way to subsequent rallies. At current prices bitcoin has a total market capitalization of around $137 billion.
Recent volatility has arisen from an uptick in investors switching to alternative cryptocurrencies, most notably bitcoin offshoot Bitcoin Cash, sending it surging to recent record highs.
Bitcoins rapid rise has fueled fears over as asset bubble. The digital currency is still rarely used to purchase actual goods or services, making it almost entirely a vehicle for speculation.
JPMorgan Chase CEO Jamie Dimon recently called bitcoin a "fraud" and UBS branded bitcoin a "speculative bubble" in a recent note to investors.
Prices have been boosted by a recent proliferation of initial coin offerings, in which start-ups create a new virtual coin or token and offer it for public sale.
According to data from Coindesk there have been more than 160 ICOs this year, which have collectively raised more than $3 billion.
The upsurge of virtually unregulated token sales sparked a recent warning from Securities and Exchange Commission Chairman Jay Clayton that many offerings are susceptible to manipulation or fraud.
But in a sign that the financial industry is starting to warm up to bitcoin, the world's largest derivative exchange operator CME Group (NASDAQ:CME) has said it plans to launch a bitcoin futures contract this year.
Elsewhere in cryptocurrency trading, Bitcoin Cash was last at $1,180.30, up around 0.78% while Bitcoin Gold was down around 5.7% to $234.50.
Ethereum, the second most valuable cryptocurrency by market cap after bitcoin, was up around 1.16% to $364.00.