Bitcoin quadruples in a month, breaks through $800

Bitcoin was trading at $867 on Japan's Mt Gorex exchange on Sunday, quadrupling in value in just one month.

Last week a US Senate hearing displayed no hostility towards the virtual currency, creating a surge of investment that has pushed bitcoin towards the $1,000 mark.

Chinese buyers have driven the recent frenzy, and investors around the globe will keep an eye on Asian buying activity to better predict whether or not the upward price momentum will last.

Bitcoin has avoided a heavy regulatory hand in the United States, Germany and elsewhere, but if the currency can't break its association with illicit activities, this current climate of tolerance could change.

In October, US authorities seized $3.6 million in bitcoin as part of a larger bust of  'Silk Road', an online black market for drugs, hitmen and hacker tools.

For now, bitcoin is riding high, increasingly used in daily transactions in pubs and shops around the world.

"As acceptance grows, that acceptance will help narrow in on what should be the proper valuation," said Zennon Kapron, from a Shanghai advisory firm.