Bitcoin reached $11,280 at one point after powering through $10,000 for the first time since March last year, propelled by a huge boost from Facebook's unveiling of its own digital unit Libra, analysts said.
"The strong resurgence in the bitcoin price is mainly due to the renewed mainstreaming interest in cryptocurrencies and the technology which underlines them," Naeem Aslam, analyst at trading group ThinkMarkets, said. "Projects like Facebook's Libra have provided much needed tailwind for this space."
The social network plans to launch Libra next year, and plans to back it with a basket of real-world currencies and a consortium of companies including Visa, MasterCard, PayPal and Uber.
- 'Blast from the past' -
Calling bitcoin's rise a "blast from the past", OANDA analyst Craig Erlam said the Facebook cryptocurrency launch seemed to be "legitimising the industry" which had come under scrutiny after the coin fell 80 percent from its peaks.
"Bitcoin is very much back in the headlines, as the cryptocurrency surged through $10,000 for the first time in more than a year and reminded us all of the good old days of late-2017," Erlam said.
Bitcoin has risen about 20 percent this month alone but is still well off record levels near $20,000 seen at the end of 2017.
Expectations that G7 countries will introduce stringent rules concerning investor identities did little to dampen the new-found enthusiasm for bitcoin, noted Gary McFarlane, a cryptocurrency analyst at interactive investor.
But the rally was almost entirely focused on bitcoin with other crypto coins "struggling today", he said.
One factor for bitcoin's success Monday, McFarlane suggested, could be its role as a conduit to effect capital flight by some Chinese investors prompted by the China-US trade war.
- $40,000? $100,000? -
There was now talk, he said, that bitcoin could hit $20,000 again, and even go much beyond, with some punters predicting $40,000 or even $100,000 by the end of the year.
"That might sound fanciful in the extreme but on past form it is a possibility - and so is a crash from wherever any potential new all-time high might form," McFarlane said.
Stock markets were under modest pressure ahead of a crunch meeting between US President Donald Trump and Chinese counterpart Xi Jinping at the weekend summit of 20 major economies.
Markets are waiting to see if Trump and Xi can find a way to get past their trade war when they meet on the sidelines of the event in Japan.
- 'Shift in rhetoric' -
Global equities last week rallied after Trump hailed positive telephone talks between the pair, fuelling hopes of a possible end to their long-running tariffs battle.
"No one thinks the US and China will do a deal in Osaka, but there is some hope that we will have a positive development that marks a shift in the rhetoric and a re-energising of talks following the breakdown in the recent discussions," said Neil Wilson, chief market analyst at Markets.com.
The dollar meanwhile dropped Monday, continuing to face pressure from expectations that the Federal Reserve could lower US interest rates as soon as July as the economy shows signs of softening amid the trade war with China.
"The dovish tilt in the US central bank's outlook was expected but what sent the Dollar tumbling was the fact that most of the US policymakers indicated that one rate decrease would probably not be enough, suggesting the need for continued easing as the economy slows down, said Konstantinos Anthis, head of research at ADSS.
- Key figures around 1540 GMT -
Bitcoin - UP at $10,915.68 from $9,939.81 late on Friday.
Euro/dollar: UP at $1.1392 from $1.1322
Pound/dollar: UP at $1.2728 from $1.2696
Dollar/yen: DOWN at 107.35 yen from 107.60 yen
London - FTSE 100: UP 0.1 percent at 7,416.69 points (close)
Frankfurt - DAX 30: DOWN 0.5 percent at 12,274.57 (close)
Paris - CAC 40: DOWN 0.1 percent at 5,521.71 (close)
EURO STOXX 50: DOWN 0.3 percent at 3,455.57
New York - Dow: UP 0.2 percent to 26,762.22
Tokyo - Nikkei 225: UP 0.1 percent at 21,285.99 (close)
Hong Kong - Hang Seng: UP 0.1 percent at 28,513.00 (close)
Shanghai - Composite: UP 0.2 percent at 3,008.15 (close)
Brent North Sea oil: DOWN 98 cents to $63.47 per barrel
West Texas Intermediate (WTI): DOWN 57 cents to $56.86