© Reuters. Bitcoin prices rally past $960

Investing.com - Web-based digital currency bitcoin extended its recent rally in pre-New Year holiday trade on Wednesday, hitting its highest levels since January 2014 amid bullish momentum.

was trading as high as $970.44 on the New York-based itBit exchange, before falling back to $951.90 by 11:00AM ET (16:00GMT), up around 2% on the day.

According to the CoinDesk Bitcoin Price Index, which averages prices from the major exchanges, prices of the crypto-currency rose 3.3%, to $961.84.

Elsewhere, yuan-denominated Bitcoin prices on Beijing-based Bitcoin jumped 3.3% to $967.03.

The digital currency is up almost 30% so far this month amid heavy buying from China and India, as investors look to shield themselves from currency devaluations and cash shortages.

U.S. and European buyers also accounted for the bulk of trading volume, as traders look for safe havens following dramatic political shifts in the world economy.

For the year, Bitcoin is up a whopping 95%, making it one of the best performing assets of 2016.

Analysts say prices of the digital currency look set to test all-time highs of $1,216 in 2017 amid rising demand for alternative assets.

Bitcoin is digital cash and is not backed by a government or central bank to regulate or issue it. It can be used to purchase goods and services from stores and online retailers.