The price of online currency BitCoin has skyrocketed this month as speculators flocked into the market. (Rick Bowmer/Associated Press)

The price of bitcoins blew past a new watershed moment on Wednesday, as units of the digital currency traded hands at more than $1,000 US each.

According to data on multiple websites that trade and store the currency, people starting paying more than $1,000 US for a single bitcoin some time on Wednesday morning.

Bitcoins are a form of digital currency that is generated by computers executing a series of algorithms known as "bitcoin mining." Because of the way the algorithms are set up, the total number of bitcoins that can ever exist in the world is limited to about 21 million.

That cap on supply, coupled with the currency's appeal among technophiles wary of the manipulation that's possible with conventional currency, has pushed the value of bitcoins through the roof this year.

The value of bitcoins appeared to have peaked at around $250 US in April of this year, before coming back down to earth. But several recent events have given the currency more legitimacy and kicked off an even larger run-up in prices

A U.S. judge last month deemed bitcoins to be legitimate currency, and the Bank of Canada even weighed in recently, saying they are not likely to replace sovereign currency any time soon.