London, Nov 27 (IANS): Bitcoin, the virtual currency on Monday hit record high as it rocketed above $9,000 for the first time and was trading above $9,500 in Asia.

Stock markets around the world have been on a tear this year, but their gains are paltry compared with bitcoin's, reports CNN.

The digital currency, which only rose above $8,000 about a week ago, has surged to an incredible 860 per cent since the start of the year.

Even a small portion of the cash managed by major funds "would make a dramatic impact on the bitcoin market", said Thomas Glucksmann, head of marketing at Hong Kong bitcoin exchange Gatecoin.

The backing of a major exchange is encouraging institutional investors "to dip their toes into the bitcoin market", CNN quoted Glucksmann as saying.

He expects more professional investors to put money into it if it breaches $10,000.

Shane Chanel from the Australia-based investment firm ASR Wealth Advisers, predicted that bitcoin will hit $12,000 within the next six months.

The cryptocurrency had plunged as much as 20 per cent after the Chinese government cracked down on offerings in the digital currency, prompting bitcoin exchanges to close their doors.

Earlier this month, it plummeted by up to 30 per cent within the space of a few days, before quickly bouncing back, after it appeared traders were switching to rival cryptocurrencies.

Cryptocurrencies are virtual "coins" that are "mined" by computers completing complex algorithms. Bitcoin is the most famous and widely used one.