Bitcoin nears $10,000 mark as hedge funds plough in

Bitcoin has hit a record high after passing $9,000 (£6,700) and is close to reaching five figures as investors in the cryptocurrency shrug off warnings of a bubble.

The cryptocurrency rose to an all-time high of $9,721 on Monday. It is now worth more than seven times an ounce of gold, which is seen as a haven in times of turmoil.

In a remarkable rally, bitcoin started the year at $1,000 and smashed through $5,000 in October.

Analysts said the decision by the Chicago Mercantile Exchange (CME) to launch bitcoin futures in December had fuelled buying, but also warned of the dangers of a speculative bubble building. The digital currency has gained more than 50% since the CME announced its decision on 31 October.

Neil Wilson, senior market analyst at ETX Capital, said: “The legitimacy this gives bitcoin as a tradeable asset is very important. The market cap of bitcoin now exceeds that of IBM, Disney [or] McDonald’s.”

The value of the 16.7m bitcoin units in circulation has exceeded $160bn.