Bitcoin could be worth $100,000 by January as crypto investors pile in on the back of Donald Trump's thumping election victory.

The digital currency hit a record high yesterday, rising above $89,000 for the first time, as a wave of 'Trump trades' erupted on global markets.

The US dollar was also on the rise and shares in electric car maker Tesla, whose boss Elon Musk is a close ally of the incoming president, soared nearly 7 per cent.

Tesla has gained around 40 per cent since the US election last week and bitcoin is up 25 per cent.

'People are keen to jump on the Trump trade sooner rather than later,' said Emmanuel Cau, head of European equity strategy at Barclays.

Bitcoin, the world's most valuable cryptocurrency, has raced higher as investors bet Trump will be friendlier to the digital money sector than his predecessor Joe Biden.

Trump has previously insisted that he will make the US 'the crypto capital of the planet' and floated the idea of creating a strategic bitcoin reserve for the government.

Additionally, the president-elect has pledged to sack Gary Gensler, the head of the US financial watchdog who has led a years-long crackdown on the industry. 

Fadi Aboualfa, head of research at digital asset firm Copper.co, said bitcoin hitting $100,000 by Trump's inauguration on January 20 was 'quite possible.'

Nigel Green, boss of investment firm deVere, said: 'This is the most significant tailwind we've seen for bitcoin since its inception.'

Trump's victory has similarly provided momentum to other major digital currencies with ethereum up 32 per cent since the election last week and dogecoin, a joke cryptocurrency previously promoted by Musk, 83 per cent higher.

So strong was the uptick that the cryptocurrency sector is now estimated to be worth £2.2 trillion, more than the market cap of the entire FTSE 100 at just over £2 trillion.

Alongside the renewed surge in bitcoin prices, the US dollar hit its highest value in four months as traders bet on an economic boom on the back of widely expected tax cuts and deregulation from the incoming Republican administration.

The party has also seized control of the Senate and potentially is in line to take the House of Representatives, giving it control of all main branches of government. 

Stock markets have also rallied strongly on hopes of tax cuts and deregulation, with the S&P 500, Dow Jones Industrial Average and tech-heavy Nasdaq all at record highs.

Tesla shares are soaring on hopes that Musk, who spent tens of millions of dollars to support Trump's re-election bid as well as appearing at his rallies on the campaign trail, will be repaid for his loyalty. 

That could mean influence over decisions about the electric vehicle market as well as the regulation of areas such as cryptocurrency and artificial intelligence (AI).

Tesla's latest jump means Musk, 53, has added £27.6billion to his fortune since the election, while the company's market cap has soared past £777billion ($1 trillion).