Bitcoin has tipped over $200 in value on a number of exchange markets this week in the face of the recent Silk Road closure, prompting the questions: Is this a bubble, and how long will it last?

Bitcoin Sydney organiser and BitPOS founder Jason Williams told ZDNet that in his opinion, there are two main factors for the recent rally.

The first can be seen in oversees markets after Chinese web services company Baidu began accepting Bitcoin as a form of payment. Williams said that many consider Baidu to be the Chinese equivalent of Google in Asia, giving a lot of people confidence in the currency since such a large company is now backing it.

"On the back of this, it seems as though the leading Chinese exchange has been going ballistic with trading," Williams said. He suggests that this may be due to new Chinese investors attempting to make early gains in a new area.

Williams also said that the closure of Silk Road has affected the value of Bitcoin. Silk Road was one of the most notorious users of Bitcoin, preferred because the currency has similar properties to cash, in that it cannot be traced under certain conditions, and does not have a chargeback scheme. The currency itself is not illegal, although it is recognised by few governments as yet.

Shortly after Silk Road was closed, Bitcoin's value on Mt Gox suffered a mini flash-crash, but in a matter of days, it bounced back to its original levels and continued to climb.

Williams said that after mainstream media caught hold of the story, it was possible that many people who had never heard of Bitcoin began to take an interest, strengthening its value.

As to whether a bubble is forming, Williams said that a similar situation occurred six months ago. Although the current ramp-up to a crash isn't as steep as previously seen and "comes from a much stronger base", Williams suggested that the community is looking at a bubble, although when it will burst is anyone's guess.

Meanwhile, other businesses that could have cashed in on Bitcoin remain hesitant over how mature the currency is.

Kogan Technologies executive director David Shafer said that while the company applauds and agrees with Bitcoin's purpose to eliminate artificial inflation of money supply by governments, it is not convinced on how the crypto-currency can replace fiat currencies as a medium of exchange.

"Since time immemorial, in all cultures and civilisations, two commodities have prevailed as preferred forms of currency when they were available: Gold and silver. These commodities have passed the test of time — remaining universally in demand across cultures for thousands of years. These are the tried and tested true forms of money, and will ultimately prevail over all present fiat currencies," Shafer told ZDNet.

"The essential properties of money are durability, divisibility, scarcity, and universal desirability. Bitcoin has not yet established that it is universally desired, or heavily in demand, over a long period of time. While it is clear that Bitcoins are currently in demand, history reminds us that there was once a mania for tulips, too.

"Bitcoin is not redeemable in gold or silver, so it has no base value in tried and tested commodities. For these reasons, while we laud Bitcoin's attempt to move away from fiat currencies and we certainly understand the desire of people using Bitcoins to avoid inflation of their stored labour by government, we are not yet convinced that Bitcoins satisfy the essential properties of money."

Although it's not an online retailer, one of Australia's oldest pubs, The Old Fitzgerald, recently began accepting payments in Bitcoin.

At the time of writing, Bitcoin is worth almost US$210 on the Mt Gox exchange.