After last week's gain pushed it above $5,000 (4,250 euros) for the first time after it launched more than 8 years ago, digital currency bitcoin is closing in on $6,000 this week.

The unregulated cryptocurrency, which at the start of this year was worth "only" $966, may be in for a sustained record run as it overcomes key obstacles, according to experts.

Over the summer, even bitcoin fans were plagued by doubts: Chinese regulators cracked down on exchanges trading the virtual currency; A dispute among developers gave birth to a new version — Ethereum — splitting the market of the currency; And Jamie Dimon, CEO of JPMorgan Chase & Co, last month called bitcoin a "fraud."

But at least for the time being, the tide seems to have turned in favor of the budding cryptocurrency. Appearing to dial back his boss' comments, JPMorgan Chase's chief financial officer last week said the firm was open-minded about the future potential use of bitcoin and its digital peers.

Jonathan Gerardin, IT manager at Wavestone, said although the currency split, coupled with China's crackdown, had dampened enthusiasm, "bitcoin has been able to overcome that and continue to progress, it has shown its resilience."

Unlike a real-world unit such as the US dollar or euro, bitcoin has no central bank and is not backed by any government. Just like other currencies, bitcoins can be exchanged for goods and services — or for other currencies — provided the other party is willing to accept them.

Bitcoin, which was worth only a few US cents when it launched in 2009, is created through blockchain technology, which publicly records transaction details including the unique alphanumeric strings that identify buyers and sellers.

Is the period of uncertainty really over?

In September, banking regulators in Beijing and Shanghai had ordered local cryptocurrency exchanges to shut down, which caused bitcoin's price to plunge some 40 percent before recovering. Since then, companies are no longer allowed to go public with cryptocurrencies in China, the largest market for Initial Coin Offerings (ICO). But observers say they are now sensing a rethink by the Chinese authorities, which has helped bitcoin surge past the $5,000 level.

"There has been a period of uncertainty but that has not lasted," said Greg Revenu of investment bank Bryan, Garnier & Co. "China represents more than 60 percent of trading and the question of their regulation, as everywhere, has made a bigger impact."

Should rumors reported in Chinese state media be confirmed, then what is by far the most well-known and traded of more than 1,000 so-called cryptocurrencies could soar to even greater heights.

But Kenneth Rogoff, professor of economics and public policy at Harvard University, told DW that while governments would initially allow the private sector to innovate, they would eventually regulate and appropriate cryptocurrencies.

A case in point is Japan, according to Rogoff. The government of the world's third-largest economy passed a law in April recognizing bitcoin as a legal payment method. It even issued operating licenses to its bitcoin exchanges earlier this year.

However, Rogoff predicts that Japan will eventually rescind those laws. "Governments cannot and will not tolerate large-scale anonymous transactions indefinitely through any virtual currency," the former chief economist of the International Monetary Fund (IMF) said, adding that this is mainly due to the potential for money laundering and other types of fraud. Instead, he said, governments would issue their own, non-anonymous digital currencies and would prevent bitcoins from entering "most of the economy."

Dubai, for example, last month launched emCash, which people can use to pay for various services with their smartphones; Estonia, hailed as one of the most advanced digital nations in the world, recently announced it would launch its own cryptocurrency dubbed estcoins. And just this week, CoinTelegraph reported that Russia, which is seen as a key player in the cryptocurrency market, would issue CryptoRuble.

Governments ICOs coupled with regulation of bitcoin and its virtual peers "will tremendously limit bitcoin's value," Rogoff argued. "Virtually every justice bureau and treasury department and also financial regulators are deciding how to restrict the use of bitcoin in the long run."

Russia latest country to regulate cryptocurrencies

The news about Moscow issuing its own official cryptocurrency comes after months of speculation about the country's approach to the technology. Last week, President Vladimir Putin spoke of a "risk" that virtual currencies — often associated with so-called anonymous 'dark web' dealings — could represent.

A day later, Finance Minister Anton Siluanov said Russian authorities had agreed to regulate the cryptocurrency market, and Russia's central bank said it would block websites selling bitcoin and its rivals to households.

"The problems related to cryptocurrencies … are difficulties regarding ... money laundering and cases that are related to identification issues," Siluanov said. "That's why we have agreed that the state should regulate the issuing of cryptocurrencies, their mining and turnover. The state should take all this under control," Siluanov said.

Siluanov, however, has not elaborated yet on how his ministry sees regulation of the cryptocurrencies market. In Russia, bitcoin promises substantial profits. One bitcoin last traded at around $4,811, up from its initial price of less than $1.

No sign of collapse?

A key reason why bitcoin's rollercoaster existence has so far not derailed, according to investment expert Revenu, is the rising use of blockchain, the technology underpinning bitcoin. The theoretically unhackable digital ledger technology is not only gaining increasing currency among banks and companies, it is also viewed as keeping the digital cash's value buoyant.

"Its value is totally marginal in the face of potential uses being put in place," Revenu said.

This, in turn, has caused digital currencies to win supporters across the globe, from the United States to Japan via India but also Europe with some major financial names coming aboard.

For Neil Wilson, analyst with Etx Capital, "the prospect of Goldman Sachs trading bitcoin is also driving buying as this might give it a toehold on Wall Street that could bring it into the mainstream and attract fresh inflows of capital."

With reports indicating that China may allow trading again, albeit with tighter regulation, some converts say bitcoin's value could go to dizzy heights like $100,000 or even $500,000, although experts from Mirabaud Securities in Geneva said the commodity may now in a "bubble zone" which could burst.

Harvard economist Rogoff foresees the price of bitcoin to collapse in the long run. Although he calls the blockchain a "breakthrough" technology that's going to "thrive and reshape finance," He added too many factors were working against the currency. "I don't think Bitcoin itself is going to capture the rents of [blockchain's] genuine ideas,"

For the moment, however, there's little evidence of an imminent collapse. As a matter of fact, speculation about the creation of Bitcoin Gold, presumably happening on October 25, will likely further balloon bitcoin's value. Similar to the first "folk" — the launch of Bitcoin Cash in early August —  this second bifurcation is also expected to hasten the diffusion of the virtual currency.