Bitcoin defies bubble fears and smashes $12,000, hits new record

Bitcoin smashed through the $12,000 barrier for the first time Wednesday, extending the virtual currency's stratospheric rise to new records as it gears up to take its place on mainstream markets.

The controversial cryptocurrency, which has been used to buy everything from a pizza to manicures, touched a new high of $12,590 in Asian trade before dipping back to $12,567, according to Bloomberg News.

Bitcoin -- which came into being in 2009 as a bit of encrypted software and has no central bank backing it -- has risen from a 2017 low of $752 in mid-January, and has surged dramatically in the past month.

Observers say the increase is due to growing interest from Wall Street, with plans for mainstream markets to offer trading in the currency's futures despite concerns from some in the financial industry about its volatility.

US regulators last week cleared the way for Bitcoin futures to trade on major exchanges, including the world's biggest futures centre the Chicago Mercantile Exchange (CME), in news welcomed by analysts.

"The fact that CME, the biggest kid on the block, is moving early into cryptocurrency, will force other major exchanges to follow suit in the fear of not missing out," Shane Chanel, from Sydney-based ASR Wealth Advisers, said in a note this week.

Transactions happen when heavily encrypted codes are passed across a computer network. 

Bitcoin and other virtual currencies use blockchain, which records transactions that are updated in real time on an online ledger and maintained by a network of computers.