Bitcoin rose above the $8,000 mark on Tuesday, extending a rally that has seen the digital currency more than double in value since the start of the year.

According to data posted on the website CoinDesk, bitcoin topped $8,325 before giving up some of its gains. Since the start of the year, bitcoin's value has increased more than 120%.

Bitcoin prices have yet to recover to its all-time highs of around $20,000 in late 2017 when a frenzy of interest from retail investors suddenly sent the value of cryptocurrencies dramatically higher.

Andy Brenner at National Alliance Securities said while it wasn't possible to confirm who is behind the direct flows of who is buying bitcoin, it looked logical that Chinese investors were using the digital currency as a means to diversify.

"We can see that the bid for bitcoin in this latest run has coincided with a big down tick in the value of the Chinese yuan versus the dollar," he said Monday in an email to CNBC.