Bitcoin reached a record high of $61,781 (around £44,445) over the weekend, before dropping sharply on Monday.

The surge came after US president Joe Biden signed off on a $1.9 trillion fiscal stimulus and ordered a speedier roll out of vaccinations.

The value of the cryptocurrency has doubled in 2021, after quadrupling in the previous year.

But the digital asset has characteristically fluctuated in value, especially driven by related events and investment.

In February, for example, electric vehicle manufacturer Tesla announced an investment of $1.5 billion in bitcoin, driving the cryptocurrency's price up by 17 per cent to $44,220.

Because many investors see bitcoin as a “hedge against inflation,” experts think that its value has been supported by the prospects of a steep economic recovery, according to a report by Reuters.

“Since the start of 2020, correlations between bitcoin and copper, equities and, in particular, breakeven inflation have increased”, wrote William De Vijlder, BNP Paribas chief economist, in a note exploring the reasons behind the rise of the cryptocurrency’s value.

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