Bitcoin swung hundreds of dollars Wednesday morning.

The digital currency spiked through $11,000 early Wednesday, hours after surpassing the $10,000 level for the first time. By 9:16 a.m. ET, bitcoin had leaped all the way to $11,377.33, according to CoinDesk.

But just over an hour later, bitcoin was back below $11,000 trading near $10,777.27 as the new milestones brought with them rapid volatility.

"Parabolic rallies are inherently unsustainable, otherwise bitcoin's value would surpass all the wealth of the world within a few years," Ari Paul, CIO and managing partner at cryptocurrency investment firm BlockTower Capital, said in an email to CNBC. "But ... while the pace of the rally is unsustainable and there will inevitably be corrections and crashes over time, it remains 'cheap.'"

Since bitcoin's market capitalization is less than $200 billion, enthusiasts point out the digital currency could rise dramatically if it draws even a tiny fraction of the world's $200 trillion in traditional financial market assets.

Much of bitcoin's incredible initial gains came just about 12 hours after the cryptocurrency smashed through the $10,000 mark that many analysts had been hyping for months. But few saw it happening this quickly.

All told, it's been an exponential ascent from 6 cents seven years ago and less than $1,000 at the start of this year.

Bitcoin jumped above $9,000 over the weekend — just about a week after topping $8,000 — as about 300,000 users joined Coinbase, the leading U.S. platform for buying and selling bitcoin, around the Thanksgiving holiday, according to data compiled by Alistair Milne, co-founder and chief investment officer of Altana Digital Currency Fund.

"We are experienc[ing] all-time high traffic at the moment," Coinbase's director of communications, David Farmer, said in an email Wednesday morning to CNBC. The "vast majority of traffic is being served but with slower performance. Our engineering team is actively working on this and should be fully resolved in a couple of hours."