A one-step synthesis of carbon encapsulated Fe/Fe₃C nanoparticles by pyrolyzing single source precursor of Prussian Blue (Iron (III) ferrocyanide) for its usage as anode material in high-performance supercapacitors is reported. The synthetic method produces 3D doughnut shaped porous structures comprising numerous interconnected Fe/Fe₃C nanoparticles entirely encapsulated within layers of graphitic carbon. Such a porous structure facilitates electrolytic ion diffusion during charge storage on Fe/Fe₃C nanoparticles through surface or near surface- based faradaic reactions, while the metallic iron helps enhancing the electronic conductivity of the electroactive material. Accordingly, the charge storage in such carbon encapsulated Fe/Fe₃C nanoparticles is governed by capacitive as well as diffusion-controlled processes at lower scan rates and is taken over by capacitive processes at higher scan rates. The material achieves a specific capacitance of 223 F/g at a scan rate of 10 mV/s along with compelling cycling performance exhibiting a little decay in capacitance over 20000 cycles. When coupled with activated-carbon cathode, Fe/Fe₃C//activated-carbon asymmetric supercapacitor out-performs many recently reported supercapacitors, which reflects their potential in next-generation storage applications.