The price of could hit more than $2,000 in 2017 driven by expectations that U.S. President-elect Donald Trump may introduce economic stimulus policies, which could send inflation soaring and propel the dollar to record highs, a report from Saxo Bank claims.

Bitcoin is currently trading around $754.51, according to CoinDesk data. A handle of over $2,000 would represent 165 percent appreciation.

During his election campaign Trump has talked about an increase in fiscal spending. Saxo Bank's note said that this could increase the roughly $20 trillion of U.S. national debt and triple the current budget deficit from approximately $600 billion to $1.2-1.8 trillion, or some 6-10 percent of the country's current $18.6 trillion economy.

As a result, the economy will grow and inflation will "sky rocket", forcing the U.S. Federal Reserve to hike interest rates at a faster pace and causing the U.S. dollar "to hit the moon".

When inflation rises the Federal Reserve may raise interest rates to bring it under control. This causes the dollar to appreciate because it would be seen as an attractive currency for foreign investors.

"This creates a domino effect in emerging markets and China in particular, leading people globally to look for alternative forms of currencies and payment systems not tied to central banks that have exhausted monetary policies or crony governments that are in full financial repression mode nor transaction systems that are long overdue for a revolution," Steen Jakobsen, chief economist at Saxo Bank, wrote in a note.

Bitcoin as the largest cryptocurrency would benefit from this "chaos", he added, as emerging market countries look to move away from "being tied" to the monetary policy of the U.S. and banking system.