Bitcoin rose to a record high today, just a day after passing the $20,000 milestone for the first time, amid surging interest from larger investors. 

The world's highest-profile cryptocurrency jumped 10.5% to $23,655, taking its gains this year past 220%.

It was buoyed by demand from larger investors attracted to its potential for quick gains and perceived inflation-hedging qualities. 

Smaller coin ethereum, which often moves in tandem with bitcoin, was trading 1.75% higher. 

With bitcoin's supply capped at 21 million, investors see in the cryptocurrency a hedge against the risk of inflation as governments and central banks turn on the stimulus taps in response to the Covid-19 pandemic. 

"There will be a search for alternative currencies due to constant fiat money debasement," Deutsche Bank analysts wrote in a note.

"It does feel that bitcoin will continue to be in high demand," it added. 

Cryptocurrencies emerged over a decade ago but quickly became associated with crime, trading glitches, hacks and wild price swings. It is only in the past few years that they have started attracting more mainstream interest. 

Bitcoin remains less regulated than most traditional assets, but institutional investors have begun to shed scepticism towards cryptocurrencies as better market infrastructure make crypto markets more accessible. 

The 2020 rally has also been driven by increasing expectations it will become a mainstream payment method, with PayPal opening its network to cryptocurrencies. 

But few people or businesses use bitcoin for commerce yet.