Bitcoin’s popularity has continued this year, with the price skyrocketing from around $600 to close to $5,000 in the space of just 12 months.
Supporters say the limited supply of bitcoin cements its status as a safe haven – such as gold – that will never lose its value and peak during times of political or economic turmoil.
Gold prices reached record highs at the height of financial crisis.
Jon Matonis, vice president at nChain, said: “Bitcoin will become the new gold and re-align the playing field of central bankers and commercial bankers.”
High profile celebrities have also backed bitcoin. Lingerie entrepreneur Michelle Mone said it is the “currency of the future”.
Naeem Aslam, chief market analyst at Think Markets UK, said: “A safe haven is a precautionary trade which investors trade under heightened uncertainty.
“The ultimate safe haven trade for investors has been the yellow shining metal, however, a new popular safe derivative which is behaving like a safe haven is cryptocurrency.”
But some financial experts say the digital currency is a bubble that is set to burst.
JP Morgan boss Jamie Dimon recently attacked bitcoin as a “fraud” and predicted the cryptocurrency will collapse.
And billionaire investor Howard Marks Another said the digital money is a pyramid scheme.
Bitcoin cannot be compared to gold, according to Adrian Ash, director of research at BullionVault.
He said: “Gold prices aren’t guaranteed to rise in a crisis, but its ancient appeal as the ultimate store of value only grows when other, more complex and intangible assets start to fall.
“The contrast with today’s bubble in cryptocurrencies like bitcoin could not be any starker.
“Gold’s appeal as a store of value comes down to its simplicity.
“A physical asset, it cannot be created at will, making it very different to stockmarket shares or new QE money.
“Unlike debt it cannot be destroyed by default.
“Unlike real estate, it can be traded instantly, at full value, in a deep and truly global market.”
The rush to buy cryptocurrencies such as bitcoin is the modern day equivalent of the California gold rush in the 1850s, according to Jordan Hiscott, chief trader at ayondo markets.
But the real winners will be the miners rather than the commodity or currency itself.
He said: “Arguably, comparisons can be drawn with a gold rush of 2017, namely cryptocurrencies such as bitcoin.
“Bitcoin has jumped over 300 per cent this year, leading to a huge increase in bitcoin mining.
“This is the process…