Due to disagreements among developers on the best upgrade model for bitcoin, the digital currency is scheduled to split, or fork, as many as two times in November. One upgrade, called SegWit2x, intends to increase bitcoin transactions speeds. The other, Bitcoin Gold, seeks to make the process of "mining" or generating bitcoins less dependent on specialized technology.
The original bitcoin will still trade after the splits, and investors in the digital currency at the time of a split should receive an equal amount of the new coin. Analysts also noted that investors were buying bitcoin in anticipation of receiving the offshoot coins from a split.
Alex Sunnarborg, founding partner of cryptocurrency fund Tetras Capital, pointed out that more developers are withdrawing support for the SegWit2x upgrade, indicating that the original bitcoin will remain dominant.
"With news around structured products, derivatives, and major institutional capital looking at the most liquid and established asset on the horizon," he said, "I remain extremely bullish on bitcoin and think we have significant further upside potential."
That said, few exchanges initially supported the offshoot bitcoin cash. The digital currency traded Thursday around $300, still a fraction of the original bitcoin's price.
Digital currency market watchers like Michael Novogratz, former macro hedge fund manager at Fortress Investment, have also cautioned that bitcoin shows signs of forming a bubble.
Financial research firm Autonomous Next estimates about 75 such "crytpo-funds" now exist.
"We think cryptocurrencies are suitable tools for diversifying portfolios. And lots of trading firms are waking up to this fact," said Nick Kirk, quantitative developer and data scientist at Cypher Capital, a cyrptocurrency trading firm.
A major U.S. digital currency exchange, Coinbase, announced Thursday it is rolling out instant bitcoin, ethereum and litecoin purchases of up to $25,000 from U.S. bank accounts. Previously, customers using their bank accounts to buy the digital currencies had to wait several days to receive them.
JPMorgan Chase Chairman and CEO Jamie Dimon also said during a conference call with media Thursday he is "not going to talk about bitcoin anymore," after calling it a "fraud" in September. The bank's chief financial officer, Marianne Lake, added that JPMorgan is "open-minded" about digital currencies that are properly regulated.
Bitcoin climbed 11 percent to a record high of $5,386.23 Thursday, according to CoinDesk.
Heavy buying from Asian investors has also supported bitcoin's price gains. Demand for bitcoin in Japanese yen accounted for nearly 60 percent of trading volume Thursday, according to data from industry website CryptoCompare. South Korean won-denominated bitcoin trading accounted for 8 percent of volume, while U.S. dollar-bitcoin trade accounted for about 26 percent, data on the website showed.
Even the Chinese yuan held about 1.5 percent of bitcoin trading volume, despite the closing of many Chinese digital currency exchanges last month due to pressure from the government.
A widely-circulated commentary piece from China's state-backed news agency Xinhua last week also raised the possibility of China allowing bitcoin exchanges to operate under licenses.