Bitcoin's price hit a record at $261 on the Bitstamp onlineexchange, driven by wider acceptance of the virtual currency.

The digital money, which can be used to pay for goods andservices on the Internet, has risen 20-fold so far this year, astrading activity has increased. Bitcoins were trading at US$259.02apiece at 1:17 p.m. in New York on Bitstamp, one of the more activeWeb-based exchanges where Bitcoins are traded for dollars, euros,and other currencies.

The rally comes a month after the closing of the “Silk RoadHidden Website,” where people could obtain drugs, guns, and otherillicit goods using Bitcoins. The virtual currency lost a third ofits value in the days after the website was shut down. Bitcoins arebecoming increasingly popular, particularly in China, said UgoEgbunike, director of business development at IndexUniverse, anindex-fund researcher.