Bitcoin soared to its highest level of the year this morning, rising as much as 22 per cent to trade at $5,080 (£3,892).
The cryptocurrency has enjoyed a strong period of trading recently, posting its largest quarterly price gain since late 2017.
Bitcoin’s price rose more than 10 per cent in the first three months of the year and crossed the $5,000 mark for the first time since November. It has since dipped to trade at just below $5,000.
Despite this, the digital currency is still behind its 2017 highs of almost $20,000 and remains below its trading price of more than $7,000 a year ago.
“Bitcoin is a kind of a beast which has the ability to score more than 20 per cent gain on a daily basis,” said Naeem Aslam, chief market analyst at Think Markets.
“However, it has been a long time since we have seen a move like today and it is going to attract many investors who have been sitting on the sidelines and waiting for this moment.”
“Bitcoin is on fire at the minute as it punches through its previous resistance level,” said Simon Peters, analyst at eToro.
“It’s difficult to determine exactly what caused the jump, but it's most likely caused by short sellers covering their positions, adding to the upward pressure on the price,” he added
Ethereum and XRP, the next largest cryptocurrencies by market capitalisation, both made gains of almost six per cent today, according to Coin Market Cap. But Aslam warned there is not as much enthusiasm for these cryptocurrency.
“Bitcoin is the trendsetter for the cryptomarket and the spillover effects are inevitable,” he said.