Bitcoin gained as much as 15% Monday as investors piled into the cryptocurrency, seeking a hedge against a broad market sell-off that saw equities plunge amid escalating trade tensions between the US and China.
The cryptocurrency soared to a 3-week high when it climbed as high as $11,947, according to Bloomberg data.
Other cryptocurrencies also jumped: Ethereum gained more than 4% and Litecoin gained roughly 5%. Bitcoin is the largest cryptocurrency, making up nearly 70% of the global market according to CoinMarketCap.
“Bitcoin is proving itself to be a macro hedge against market risks,” wrote Thomas Lee, managing partner of Fundstrat Global Advisors.
Since the start of 2019, Bitcoin’s correlations to both the US dollar and equities has been declining, Lee wrote. At the same time, it’s becoming more linked to gold, a well-known safe-haven asset for investors looking to shield portfolios from market volatility.
The contrast was seen as bitcoin gained Monday while US stocks suffered their worst rout of 2019. The losses came after China devalued its currency and said it would stop buying US agriculture products, moves seen as retaliation to President Trump’s threat to impose a new 10% tariff on additional $300 billion of Chinese imports to the US starting September 1.
Bitcoin’s gain comes after it sold off sharply in July, plunging 18% as US lawmakers criticized after Facebook’s digital coin, Libra, which raised concerns about the overall legitimacy of crypto.
So far this year, Bitcoin is up roughly 170%, although it is still far below its highest price near $20,000 set in 2017.