Some analysts also attributed bitcoin's gains to investors looking for a safety trade after North Korea fired a ballistic missile over Japan.
"With both bitcoin and ether, we're seeing a flight to safety due to the issues in North Korea, similar to when investors previously flocked to gold out of equities during previous wars," said Andrew Keys, head of global business development at blockchain software developer ConsenSys.
Demand for bitcoin and ethereum from Japanese and South Korean investors remained strong, according to CryptoCompare. The site showed trade in the Japanese yen and South Korean won accounted for nearly half of all bitcoin trade volume, while won-denominated ethereum trade accounted for about 22 percent.
Asian stocks closed mostly lower, European markets fell more than 1 percent and U.S. stocks opened lower after North Korea late Monday Eastern Time fired a ballistic missile over Japan. Local broadcaster NHK said Japan took no action to shoot down the missile, which later broke into three pieces and fell into the sea.
U.S. stocks recovered most of their losses to trade narrowly mixed midday Tuesday.
Gold futures for December delivery extended Monday's jump to climb more than half a percent Tuesday to $1,331.90 an ounce, their highest since Nov. 9.
Many digital currency enthusiasts expect bitcoin to become the "digital gold" of cryptocurrencies since its supply is limited to 21 million but demand remains strong as many investors use bitcoin as their way into the digital currency world.
That said, bitcoin is far from reaching the same status as the precious metal. About $7.5 trillion of gold is in circulation, while the value of all digital currencies only reached $160 billion Tuesday, according to CoinMarketCap. Bitcoin had the largest share at nearly $75 billion, while ethereum was second with a market value of $34.7 billion, the site showed.