Bitcoin has smashed past $5,000 for the first time ever

Bitcoin has broken above its previous high of $5,000, rising as much as seven per cent today.

The cryptocurrency's value plunged last month on reports that China was set to impose a ban on initial coin offerings - where companies raise cash via a cryptocurrency or digital token.

Meanwhile, there was a flash crash in bitcoin prices on Tuesday, after Russia decided to ban the websites of exchanges offering cyptocurrencies. The digital currency fell more than $600 in a matter of minutes, to below $4,200, although it quickly recovered.

Breaking the $5,000 barrier this morning represents bitcoin's biggest daily rise in more than two weeks and a rally of nearly 75 per cent in one month.

Today, analysts said there were a variety of possible explanations for bitcoin's surge, including Amazon potentially bringing bitcoin on their platform, Goldman Sachs exploring the idea of a bitcoin desk and the dollar losing value.

"Bitcoin is the king and holds the biggest crown among cryptocurrencies," said Naeem Aslam, chief market analyst at Think Markets. "This is simply explosive performance and in terms of percentage, the gain is 63 per cent from its lows."

He added: "The idea of Amazon adding bitcoin as an acceptable form of payment is intriguing. Adding bitcoin on their platform would confirm (it) as an acceptable form of payment.

"If Amazon successfully implements and brings bitcoin on their platform, it would only be a matter of time before we hear eBay making a similar announcement. After all the entire idea to remain in the game of the online shops is to provide users the best and most efficient way of shopping."

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