Bitcoin is better than gold “on every front” and could eventually be worth around $700,000, according to an institutional investor.

John Pfeffer, a partner at UK-based Pfeffer Capital, made the remarks at the Sohn investment conference in New York. That event traditionally serves as a place for investors to recommend the best stocks to invest in – and has never seen anyone recommend cryptocurrency before.

“Bitcoin is the first viable candidate to replace gold the world has ever seen,” Mr Pfeffer said. "So if bitcoin becomes the dominant non-sovereign store of value, it could be the new gold, or new reserve currency."

He added: “Most [other] crypto assets out there are bad bets.”

Mr Pfeffer said that if bitcoin displaced 25 per cent of foreign reserves, the total worth of the bitcoin network would be somewhere in the region of $6.4 trillion. Bitcoin’s current market cap is currently around $150 billion, while one bitcoin is worth just under $9,000.

It is the first time a speaker has mentioned bitcoin or any other cryptocurrency as an investment opportunity at Sohn, and comes at a time that major hedge fund investors are placing their bets on the digital asset.

The renowned investor George Soros is reportedly preparing to invest in bitcoin, having previously called it a bubble. Billionaire investor Bill Miller revealed in December 2017 that half of his hedge fund was tied up in bitcoin. At the time, the value of one bitcoin was close to $20,000.

To reinforce his faith in bitcoin, Mr Pfeffer donated 10 bitcoins to the Sohn Foundation on the condition they did not cash them in for five years, saying: “Buy the ticket, take the ride.”

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The fund manager also warned that there were “substantial risks” still associated with cryptocurrencies, however unlike gold their utility went far beyond a store of value.

In countries with struggling currency, bitcoin and other digital currencies could offer a legitimate alternative. This supports recent research from Investing.com that found countries with unstable economies were increasingly interested in cryptocurrency.

By taking a percentage of users from each country that used its cryptocurrency services, the investment website determined that the top five countries most interested in cryptocurrency are Venezuela, Kosovo, Lithuania, Belarus and Georgia.

“In addition to cheap [cryptocurrency] mining costs, another thing that the Eastern European countries which appear on this list have in common is that all have gone through prolonged periods of war and recession recently, which has resulted in the poor working class losing trust in government and banks,” Jesse Cohen, a senior analyst at Investing.com, said in an emailed statement to The Independent.