Chinese and Indian investors hoping to evade strict capital controls and circumnavigate cash restrictions have flooded into Bitcoin, sending the cryptocurrency soaring 17 per cent in one week and topping off a dramatic year for the extremely volatile asset class.

The price of Bitcoin – the encrypted currency underpinned by blockchain technology – shot through a key resistance level at $US800 at the end of last week, and has continued to soar higher, peaking at $US911 ($1268) before settling around $US900 on Tuesday, close to a 3-year high.

"We are seeing a wave of Indian buyers looking to circumnavigate the recent push to remove large slabs of cash from circulation and who otherwise have trouble moving fiat currency," said Sam Lee, chief executive of Blockchain Global, formally Bitcoin Group and developer of Australia's largest bitcoin exchange.

The much-hyped technology will enhance productivity across the agriculture, banking, healthcare, logistics and public sectors: a study has found. Supplied

"That combined with Chinese traders who are using Bitcoin as a natural hedge to the devaluation of the yuan, is driving the Bitcoin price to these highs," he said.

Bitcoin reached an all-time high of $US1216.73 on the Mt Gox exchange in November 2013, a result of frenzied market speculation, but has traded within a band of $US450 and $US600 for most of 2016.