Microsoft has announced that it will accept bitcoin payments for its digital products, causing the price of the cryptocurrency to surge by $20.

Microsoft customers in the US will now be able to purchase Windows, Windows Phone and Xbox software and digital content using bitcoin, as a result of an integration with BitPay. The Georgia-based bitcoin processor has previously partnered with PayPal to allow online merchants to accept cryptocurrency for digital goods.

"You can now use bitcoin to add money to your Microsoft account," Microsoft's payments information page states. "Once you add money to your Microsoft account, you can use it as a payment option to buy apps, games, and other digital content from Windows, Windows Phone, Xbox Games, Xbox Music, or Xbox Video stores."

Microsoft claims that bitcoin transactions should process immediately but could take up to two hours. The company also warns that the world's most valuable altcoin can only be used at select online stores and can't be used to purchase Microsoft products and services directly.

Bitcoin price surges on Microsoft news

Following Microsoft's announcement, the price of bitcoin and almost every other major cryptocurrencies rose.

Bitcoin's market cap pushed back up towards $5 billion (£3.2bn, €4bn) for the first time since November as a result of a sudden 3% increase in value.

Microsoft accepts bitcoin price spike
The price of bitcoin shot up by $20 on the news that Microsoft is to start accepting the cryptocurrency CoinMarketCap

Litecoin, dogecoin, darkcoin and namecoin, which typically follow the lead of bitcoin, all rose by a similar amount.

'Bitcoin is better than currency'

Microsoft founder Bill Gates recently revealed that he was an advocate for bitcoin, stating in October that it was a key technology that held revolutionary potential.

"Bitcoin is exciting because it shows how cheap it can be," Gates said in an interview with Bloomberg. "Bitcoin is better than currency in that you don't have to be physically in the same place. And of course for large transactions currency can get pretty inconvenient."

Other major companies and retailers to integrate bitcoin payments include CEX, Virgin Galactic, Overstock and Dell.

In a recent interview with IBTimes UK, Dell's Europe, Middle-East and Africa (EMEA) president Aongus Hegarty said that the company's decision to accept bitcoin was driven by consumer demand.

"All aspects of decisions, like the one to accept bitcoin, really comes from the customer and from customer requirements," Hegarty said. "We were seeing requests from customers, particularly in the US, and really the driving force behind that decision was from out customers."