Bitcoin is trading back above $5,000 this afternoon after hitting a 2019 high earlier this week.
The cryptocurrency soared 20 per cent within an hour yesterday morning reaching a high of $5,087, breaking the $5,000 barrier for the first time since November last year.
Bitcoin’s price has risen more than 10 per cent since the beginning of 2019, but the digital currency is still lagging behind its 2017 price of $20,000.
Analysts have warned that bitcoin's price surge could be short-lived, however.
Craig Erlam, a senior market analyst at forex platform Oanda, said: “It was like the good old days in the crypto market on Tuesday, as traders in Europe and the US woke up to a more than 20 per cent rally in bitcoin.
“Safe to say, it had become the forgotten instrument for a while as the very volatility it was known for slipped away and price consolidated around $4,000.
“In the absence of any real catalyst though, many are left to question whether there’s anything of substance behind the bounce or if it’s just a short squeeze.”
The cryptocurrency's recent climb has been attributed to a mystery buyer snapping up huge quantities of the digital coin, reportedly worth $100m (£76.2m), triggering a surge in trading.
Ayondo markets chief trader Jordan Hiscott added: “For the rally to be sustained we would need to see two things: a return of retail-based traders to add bitcoin back to their portfolios, as yet it feels the trade moves are dominated with swing and intraday traders and for a break above large resistance at $5,800.”