The internet currency was used as legal tender in at least six drugs transactions in 2013, according to the report in the Dagens Nyheter daily.
In one high profile case in December 2013 in the far northern city of Haparanda, several people were convicted of drugs offences and a large amount of Bitcoin was found in the principal suspect's computer during the police investigation.
"He has handled around half a million kronor ($77,000). Then how much of it is an increase in value is difficult to say," said prosecutor Linda Strömberg to the newspaper.
Strömberg believes that the currency will become more common in drug transactions. The National Criminal Investigation Department's cybercrimes unit has confirmed that it has recently uncovered several cases of criminal business involving the use of Bitcoin.
Bitcoin is a digital currency and peer-to-peer introduced as open source source software in 2009 by developer Satoshi Nakamoto. The currency uses cryptography to control the creation and transfer of money. The currency has enjoyed a boom in the past year, gaining significantly in value.
The currency gained media attention in Scandinavia when a young Oslo electrical engineer used the profits from $27 Bitcoin investment to put down a deposit on a two bedroom apartment in Oslo.
The 5,600 bitcoins he bought in January 2010 for around $27 were worth well over four million Norwegian kroner ($680,000) by the time he decided to cash in in April 2013.