Bitcoin price surges past $42,000

It comes as investors and hedge fund managers are betting on it becoming a more mainstream payment method.

The digital coin has more than quadrupled in value since the start of 2020, with the currency’s total value now past $US600 billion ($A780 billion).

According to Forbes, the latest bull run began in October after PayPal announced it would begin offering Bitcoin and cryptocurrency support.

Citibank and JPMorgan have also been making bullish Bitcoin forecasts.

A leaked report from Citi in December referred to the cryptocurrency as “21st century gold”.

The surge triggered excitement among investors. Binance, a cryptocurrency exchange, announced gleefully that Bitcoin had surged from $US32,0000 ($A43,000) to $US33,000 ($A44,200) in less than 45 minutes.

Bitcoin entrepreneur Andreas Antonopoulos said on Twitter the world had been irrevocably changed by the cryptocurrency.

“On January 3, 2009, the #bitcoin experiment began,” he said.

“The world was changed forever. The separation of money and state became a real possibility for millions, billions.

“Thank you, Satoshi, Hal Finney, and all of the other earliest bitcoin experimenters.”

This is not the first time the digital coin has spiked in value.

In 2017 the price of Bitcoin surged only to plummet in early 2019 as China cracked down on cryptocurrency businesses. It then resurged in May 2019.

The digital coin was invented by an unknown person or group of people using the name Satoshi Nakamoto.

It exists without a central bank and can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries.

Transactions are recorded in a public distributed ledger called a blockchain.

As the US dollar declines in value amid inflation fears, Bitcoin has become a more attractive investment.

There is speculation Bitcoin could become an alternative to gold – the traditional safe-haven investment.

Bitfinex chief technology officer Paolo Ardoino told the Guardian Bitcoin could draw more interest from a broader audience, not just fund managers.

“While a growing institutional presence has been part of the narrative of the current bull run, we may see increased retail interest in bitcoin as a form of digital gold,” he said.

Chainlink co-founder Sergey Nazarov wrote in an email on Saturday that it was very likely the asset would eventually pass $US100,000 ($A130,000) per coin.

“People have been steadily losing faith in their government currencies for years, and the monetary policies resulting from the economic impact of the coronavirus have only accelerated this decline.”

Australian stocks were set to open lower on Monday, with the SPI futures index down 81 points, indicating an opening fall of about 1.2 per cent.

The Australian dollar was at US77.05c. Gold was selling for around $2400 per ounce.