The price of the world’s largest cryptocurrency climbed as high as $11,860, according to CoinDesk data, hitting a more than 3-week high. Bitcoin’s value now accounts for nearly 70% of the global crypto market, according to CoinMarketCap.
Global stock markets on the other hand have been sliding lower on the back of renewed trade uncertainty, after President Donald Trump said last week that Washington would impose 10% tariffs on another $300 billion worth of Chinese goods.
The pan-European Stoxx 600 index slipped 1.6% on Monday while the MSCI’s broadest index of Asia-Pacific shares outside Japan plummeted 2.5%. Dow futures meanwhile were off by about 100 points.
Analysts have previously argued the case that bitcoin could be a safe haven asset, with investors having flocked to the digital asset in the past on the back of an escalation in U.S.-Sino tensions.
“Bitcoin has many use cases and one of the most important is as a form of digital gold,” Charles Hayter, CEO of digital currency comparison platform CryptoCompare, told CNBC by email on Monday. “We have seen bitcoin jump before on macro uncertainty as it becomes a conduit and flight-to-safety asset.”
Yuan depreciation
Bitcoin’s jump in value also comes as China allowed the yuan to break the seven-per-dollar level for the first time in 11 years, triggering fears of a potential currency war.
The yuan fell after China’s central bank, the People’s Bank of China, set the currency’s daily midpoint at 6.9225 per dollar, its weakest level since December last year.
Simon Peters, an analyst at trading platform eToro, said Chinese investors could be seeking to diversify as the yuan depreciates.
“Given that Chinese investors make up a large proportion of crypto investors, there’s a strong possibility some are backing bitcoin’s chances against the yuan,” Peters said in a note on Monday.
