The bitcoin price has reached a new record high, breaking through $68,000, and analysts predict that the world’s best-known cryptocurrency will rise further in the coming weeks.

This beats the previous record high set in late October, when bitcoin reached nearly $67,700 before falling back again when investors discovered a new cryptocurrency, shiba inu. Other cryptocurrencies have also risen to record highs, such as ethereum, which soared to $4,837.

Bitcoin has always been volatile but remains the world’s largest digital currency, with a market value of more than $1.1tn. Five years ago, a single bitcoin was worth about $700. Investors are buying it because they are worried about rising inflation – as an alternative to gold, a traditional inflation hedge – and as bond yields are falling.

Wilfred Daye, the head of the trading platform Securitize Capital, said: “Inflation is a major consideration for investors today, and the younger generation of investors often favours cryptocurrency as a hedge over gold. In fact, while gold has slid throughout the year, bitcoin and ethereum have more than doubled. Retail investors have played a major role in fuelling this shift and institutional investors are increasingly following suit.”

In January, the US investment bank JPMorgan made a bold prediction, forecasting that bitcoin could rally as high as $146,000 in the long run as it competes with gold as an alternative currency.

The latest gains come after the US tech entrepreneur Jack Dorsey, the chief executive and co-founder of the payment service Square, said he was committed to making bitcoin “the native currency of the internet” and his company had no plans to expand its offerings to other cryptocurrencies. He told analysts on an earnings call last week the firm was working on a number of initiatives, such as hardware wallets to store bitcoin, and functions to allow consumers to mine for the cryptocurrency.

However, the Bank of England deputy governor, Sir Jon Cunliffe, said last month that digital currencies such as bitcoin could trigger a financial meltdown unless governments stepped forward with tough regulations.