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Wow. The bitcoin bears have to slink back to their lairs yet again. On Tuesday, it touched a new all-time high of $73,661 (£63,035) at around 9.15am London time, before falling back as traders took profits. That means it has already risen by more than 65 per cent this year, a stunning reversal of the gloom that pervaded the whole cryptocurrency community through much of 2022 and 2023. Go back to the beginning of last year and bitcoin was trading below $17,000 (£13,281).

And now? Well, the immediate target for the bulls is $75,000, but who knows? Cathie Wood, founder and chief executive of ARK Investment Management, believes it will shoot on upwards, calling it “digital gold”. Since she showed huge courage, keeping the faith through the plunge in values, she deserves to be listened to.

The parallel with gold is a helpful way of analysing what is happening. The immediate reason for the surge in price is that it has become much easier to buy and sell cryptocurrencies.

The Securities and Exchange Commission in New York was forced to give permission for 11 exchange traded funds, or ETFs, to trade in it. That made it possible to get exposure to bitcoin without having to own it. It is as though you don’t have to buy a physical chunk of gold but can still benefit if the price climbs.

The result, unsurprisingly, was to boost demand. Make anything where there is a fixed supply easier to buy and it will push up the price; that increase in price will in turn suck in........

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