Bitcoin surged 6 percent on Tuesday to trade above $2,900 for the first time and hit a record high.

The digital currency hit a high of $2,911.86 earlier in the session before giving back some gains, according to CoinDesk.

The cryptocurrency has had a stellar year, rising nearly 200 percent, easily outperforming stock market benchmarks like the S&P 500 and the Nasdaq composite in 2017. Entering Tuesday’s session, the S&P and Nasdaq had risen 8.81 percent and 16.9 percent for the year, respectively.

Bitcoin in 2017

Source: FactSet

But that performance has come with greater volatility. On May 25, bitcoin plunged more than $300 after skyrocketing more than 12 percent in that session.

A contributing factor to bitcoin’s recent surge is growing demand from Asia, especially in Japan. Japanese interest in bitcoin has risen ever since the government approved bitcoin as a legal payment method in April.

Investors also plowed more money into the currency after Minneapolis Federal Reserve President Neel Kashkari commented on the blockchain technology behind bitcoin, saying it “has more potential than bitcoin itself.”

Blockchain is a record of transactions and historical value categorized into blocks by a network of computers. The technology has spurred the recent creation of other digital currencies.

—CNBC’s Evelyn Cheng contributed to this report.

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