Bitcoin hit a record of $62,575 on Tuesday, extending its 2021 rally to new heights.

A physical imitation of a Bitcoin is pictured in Dortmund, Germany, in this file photo. January 26, 2020.
A physical imitation of a Bitcoin is pictured in Dortmund, Germany, in this file photo. January 26, 2020. (AFP)

Bitcoin has hit a record high above $62,000, as the cryptocurrency exchange Coinbase prepares to launch shares on Wall Street.

The world's biggest cryptocurrency has more than doubled in price this year amid growing mainstream acceptance as an investment and a means of payment, and as investors seek high-yielding assets amid low interest rates.

Major firms including BNY Mellon, Mastercard Inc and Tesla Inc are among those to have embraced or invested in cryptocurrencies. 

Bitcoin reached $62,377 on Tuesday, a huge gain of 114 percent since the start of the year.

Growing market

The cryptocurrency market has grown exponentially in 2021 and is now worth a staggering $2 trillion as it increasingly attracts interest from big names on Wall Street.

On October 31, 2008, in the wake of the financial crisis, one or more anonymous people, hidden behind the pseudonym Satoshi Nakamoto, published the founding white paper of bitcoin.

The goal was to create a means of payment, the security of which would not be overseen by a central bank or financial organisations, but instead regulated by software with rules almost impossible to alter.

While anybody can "mine" for new bitcoins, to do so requires giant data centres, leading to platforms such as Coinbase providing a way of trading in cryptocurrencies.

Banks and payment services such as Paypal allow transactions in certain digital currencies.

Almost 18.7 million bitcoins have been created since the first block of 50 in early 2009.

A limit of 21 million bitcoins has been set by Nakamoto.

READ MORE: What can you buy with Bitcoin?

An investment

Despite bitcoin's volatility and limitations as a means of payment, it is being seen as a store of value to rival and even one day potentially surpass gold as a haven investment in the face of high inflation for example.

After bitcoin's value crashed in 2018 it rebounded, and has smashed records since late last year, rocketing from around $12,000 in October to more than $60,000 a month ago.

Against this backdrop, central banks and market regulators warn about the volatility's impact, especially on small investors who risk suffering big losses.

But it is clear that some individuals and companies have made huge gains from bitcoin, while major central banks are working on their own potential digital-currency projects.

Electric car giant Tesla has invested $1.5 billion in bitcoin and in March began accepting the currency as payment.

Tesla's multi-billionaire chief executive Elon Musk has used social media to e spouse the merits of cryptocurrencies, helping to lift interest and prices.

READ MORE: China risks losing gains on climate change due to bitcoin mining rush

Source: TRTWorld and agencies