The price of bitcoin has hit highs not seen since 2014

Lynsey Barber
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Bitcoin could be heading for a good 2017 (Source: Getty)

The price of bitcoin has hit a near three year high as global and political uncertainty continue to make the cryptocurrency an increasingly attractive safe haven for investors.

The price of bitcoin versus the dollar surpassed its 2016 high of $781.31, reaching highs not seen since early 2014 and creeping closer toward the $800 mark.

It hit a high of $787.50 in the early hours of Tuesday morning, according to CoinDesk's bitcoin price index (BPI), however, those gains have been tempered, returning under the $780 mark by mid-afternoon.

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"Bitcoin is rallying on a mixture of global and political woes - from Trump throwing curve balls with his foreign policy, China's continued Yuan devaluation, to India's and Spain's moves against cash," said Charles Hayter, founder and chief executive of CryptoCompare.

And that rally could continue next year.

Next year looks to add continued fuel to the fire with Brexit realisation, Trump's arrival in the White House, the continued fallout from Italy's malaise, and key elections in the Eurozone and globally.

"The key word is uncertainty - when uncertainty peaks safe haven assets see a boost - and bitcoin as a form of digital gold is a natural hedge as well as a route to evading capital controls. Bitcoin is also coming in from the cold in the sense that their is a grudging acceptance now from financial incumbents," he added.

Saxo Bank named huge gains for investors from a rise in bitcoin as one of its outrageous predictions for 2017.

Read more: Meet the entrepreneur who built the world's biggest bitcoin wallet in York

"As some of our past outrageous predictions have turned out to be far less outrageous that at first thought, it is important that investors are aware of the range of possibilities outside of the market consensus so that they can make informed decisions, even in seemingly unlikely market scenarios," said chief economist Steen Jakobsen.

The price of bitcoin has risen 80 per cent since the start of the year.

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