A pile of Bitcoins are shown here after Software engineer Mike Caldwell minted them in his shop on April 26, 2013 in Sandy, Utah. Bitcoin is an experimental digital currency used over the Internet that is gaining in popularity worldwide George Frey/Getty Images Another day, another monster run for bitcoin traders.

Bitcoin was trading around $240 in the beginning of October. Now — after a gain of 10% on Tuesday added to its earlier run — it's closer to $400.

Now, bitcoin traders are looking for answers as to why the cryptocurrency is skyrocketing in value.

"You're seeing more and more institutional investors moving into the space," said Brendan O'Connor, CEO of Genesis Global Trading, a bitcoin broker.

Demand has been coming from China. O'Connor said the daily volume of bitcoin trades from China has been two to three times the ordinary amount over the past two weeks.

It's not just the value of bitcoin that's increasing; it's also the prevalence of use.

The number of daily bitcoin transactions appears to be steadily rising, according to tracking site Coinbase. And that has the potential to have a tremendous effect on the cryptocurrency.

"We are seeing unprecedented volume globally," said Michael Sonnenshein of Grayscale Investments, which manages the Bitcoin Investment Trust, a publicly listed vehicle that tracks bitcoin. Bitcoin Investment Trust hasn't been public very long, but it enjoyed a run-up of more than 7% on the good news Tuesday.

Neither O'Connor nor Sonneshein centered on a single factor that is boosting bitcoin's value. Sonneshein pointed out that as bitcoin auctions run by the US Marshals draw closer (only in a handful of instances), the cryptocurrency tends to see increased trading activity.

The next government auction of seized bitcoin is November 5.

Here's a graph tracking bitcoin: