Each "coin" has been worth less than $10 (Rs 545) for most of the currency's history, but this week (April 8-14, 2013) the value surged past $200 (Rs 10902) - with the recent bailout crisis in Cyprus seen by many as one of the triggers of the surge.
Wednesday (April 10, 2013) saw a "flash crash," as the value dipped close to $100 before recovering.
The meteoric rise in value is also linked to what some economists say is the biggest problem with the currency: that the supply of bitcoins increases only slowly, at a rate that's coded into the system.
That's a contrast to a regular paper currency like the dollar, whose supply is managed by a central bank like the US Federal Reserve.
The Fed engineers the dollar supply to increase slightly faster than the growth of the economy, which means that the value of the dollar falls slightly every year, in the phenomenon known as inflation.