Bitcoin shot up 6% on Tuesday to its highest value in nearly a year-and-a-half.
The price rose as high as $35,198 (£28,844) at one point amid speculation US regulators could soon approve an exchange-traded fund (ETF) based on its market price.
This would allow investors to gain exposure to Bitcoin without owning the cryptocurrency directly – and could lead to a wave of new interest.
It follows a 10% surge in Bitcoin on Monday, with the wider crypto market also experiencing gains.
A US court ruled in August that US regulator the Securities and Exchange Commission (SEC) had been wrong to reject an application for a Bitcoin ETF from Grayscale Investments.
Reports afterwards suggested officials did not plan on appealing against the ruling and ever since speculation has been mounting that the SEC may finally give the go-ahead to such a fund.
Regulators have previously approved ETFs linked to Bitcoin – but only in the futures market.
Read more from business:
Cap on bankers’ bonuses to be abolished
UK unemployment rate remains low
Real living wage raised for 460,000 workers
Be the first to get Breaking News
Install the Sky News app for free
Investment giant BlackRock is among several major firms with pending applications for spot price Bitcoin ETFs, but last week denied reports that its bid had been approved.
However, anticipation has heightened this week after clearing house DTCC listed BlackRock’s iShares Bitcoin Trust on its website, suggesting a sign-off by regulators might be imminent.
Standard Chartered’s head of digital assets research, Geoffrey Kendrick, said: “The SEC being pressured by the courts increases the probability [of an ETF approval].”
Steen Jakobsen, chief investment officer at Saxo Bank, added: “The value of… any asset, basically, is the amount of people using it. So the ETF would make a large audience and increase liquidity.”
Despite the rise, the cryptocurrency’s price has been volatile in recent years and its current value is still far below its record high of almost $69,000 (£56,600) in November 2021.
Concerns have also been raised about its environmental impact and potential losses suffered by investors.
Earlier this year the cross-party Treasury Committee of MPs called on the government to treat crypto trading and speculation as a type of gambling, amid worries about a lack of regulation in the sector.
