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The currency has risen by 55 per cent this month and pushed it past the $1,900 mark on the Bitfinex exchange on Friday.

Gold is currently trading at $1,232.90, with the highest price of gold in the last 10 years hitting $1,905.10 on September 5, 2011.

The rise of bitcoin in recent weeks is helping the overall soar in so called alt-coins which has been fuelled by frenzied speculation with some values rising by a staggering 500 per cent in the past week alone.

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There are more than 830 alt-coins ranging from Litecoin, a rival to bitcoin, to MiketheMug, a coin that promises to make weekly payouts to holders.

Bitcoins are discovered in a process of mining, rather than being printed, in a process where transactions are verified and listed in a public ledger, known as the block chain.

People send bitcoins to each other over the bitcoin network all the time, but unless someone keeps a record of all these transactions, no-one would be able to keep track of who had paid what.

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Five pound notes with low serial numbers, especially those beginning with AA01, can be worth 200

The bitcoin network deals with this by collecting all of the transactions made during a set period into a list, called a block.

Its the miners job to confirm those transactions, and write them into a general ledger.

The process is largely unregulated with anyone with access to the internet and the right hardware can participate in mining.

Speculation in the market is said to have benefitted anonymous payment systems, which are believed to be used by cyber criminals who are executing attacks such as the ransomware hack that spread across the globe on Friday, hitting more than 200,000 victims such as the NHS.

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The rise in these initial coin offerings (ICOs) - unregulated issuances of cryptocurrencies where investors can raise money - has drawn the attention of both lawyers and financial analysts.

Some believe the issuing of ICOs could be being used as a way of raising cash for businesses while circumnavigating existing securities laws and regulations.

Ajit Tripathi, a director in fintech at PwC, said: An ICO issues crypto tokens rather than stocks and bonds, but thats irrelevant to the substance of the activity, which is raising capital from the general public.

Capital raising activities need to be regulated to protect investors.The question is, how sophisticated are these investors?

Regulators have been slow to react to the rise of cryptocurrency trading, with Japan only moving to tighten regulation of trading last month.

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Observers say individuals are trading in alt-coins from corporate IT departments, mainly in the financial sector, but have fallen under the radar of senior executives.

Brian Lord, former deputy director for intelligence and cyber operations at GCHQ, the UKs electronic surveillance agency, said: Systems are being used here by employees to increase their own individual wealth. In the process, corporate systems are coming into contact with the fringes of the criminal world.

ICOs are also beginning to gain attention from venture capitalists such as billionaire and early bitcoin supporter Tim Draper, who announced plans to invest in the highly anticipated launch of Tezos this month.

The token is expected to pick up widespread support from the sectors many unregulated exchanges, many who have the capacity to make or break a new coin.

Bitmex trader Arthur Hayes, said: We are just looking at whether they are going to be popular, they are selling you a dream.

"The dream is either going to happen or not and thats why they are exciting for people. That tension is great for an exchange.

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Bitcoin bubble fears as online currency now more valuable than GOLD - Express.co.uk