Estate agent Knight Frank has compared how an investment in the cyrptocurrency Bitcoin would have performed compared to an investment in highly prized central London property.

In July 2010, it would have taken 50,000 Bitcoins to buy one measly square foot of an eight-bedroom mansion house in Mayfair, based on a value of £28m.

By December last year, the value of Bitcoin had rocketed by a factor of 23,000 against the US dollar and those 50,000 Bitcoins reached a value of around £35m.

This extravagant sum would have comfortably bought the Mayfair mansion, home cinema and swimming pool included, with several million pounds left to spare.

The 26 per cent rise in Mayfair property prices over the same period could not match up to the soaring popularity of the world's favourite digital currency.

However, after a period of heightened volatility culminating in the dramatic collapse of the MtGox exchange, Bitcoin suffered a severe decline.

Those 50,000 Bitcoins that would have bought the eight-bedroom mansion last year, were worth £13.2m by March 2014. However, things were not so disastrous for our fictional Bitcoin property buyer.

50,000 Bitcoins in March this year would still be enough to buy a swanky three bedroom penthouse in Mayfair.

Knight Frank has compiled a useful timeline of Bitcoin value vs London property over the past four years:

July 2010 (£1,621) Less than one square foot of an eight-bedroom mansion house in Mayfair

May 2011 (£103,409) – A studio flat in Croydon

June 2011 (£903,982) – Two bedroom flat with river view in Wapping

November 2013 (£7.5m) – Six bedroom terraced house in Kensington

December 2013 (£34.6m) – Eight-bedroom mansion house in Mayfair with home cinema and swimming pool

March 2014 (£13.2m) – Three-bedroom penthouse in Mayfair

Tom Bill, associate in the Knight Frank residential research team, commented on the research: