Is bitcoin really back?

Don’t look now, but bitcoin is booming again.

Even for an asset that’s constantly on a rollercoaster ride, the past few months have been particularly turbulent for bitcoin. After President Trump’s electoral victory, the crypto king skyrocketed to a record high of nearly $110,000. But as Trump’s various olive branches to the industry became overshadowed by geopolitical-shifting tariffs, bitcoin dropped sharply—along with the stock market and other cryptocurrencies.

But the cryptocurrency has begun to rebound over the past week, jumping 10.79%. This morning, bitcoin broke above $94,0000, its highest level since March. That marks a roughly 22% increase from the asset’s low this month, and the first time this year bitcoin is in positive territory.

Meanwhile, the S&P 500 is up just 0.75% over the past week, and the dollar has fallen to a roughly three-year low.

Digital gold

Investors hoping that the US and China can work out a trade deal helped drive the asset up today. Trump’s reassurance that he was not firing Fed Chair Jerome Powell—for now—boosted both the wider market and bitcoin as well.

But investors are also flocking to bitcoin for the same reason they are hoarding gold like leprechauns: Many see bitcoin as a safe haven from geopolitical uncertainty.

Investors poured $936.43 million into bitcoin exchange-traded funds on Tuesday, the highest inflows in a single day since January 17—the same day the market tanked on Trump’s threats to oust Powell.

“Today, as more corporations and institutions are buying bitcoin, and more governments are holding it as a strategic reserve, the ‘hedge asset’ narrative is gaining traction. Investors are increasingly treating it like digital gold. The result is a lower beta to equities in down periods,” wrote Bitwise CIO Matt Hougan in a note last week.

But is bitcoin really digital gold? After all, gold is known as a safe haven because it's considered a stable, secure store of value that isn’t correlated to other financial markets. “Bitcoin” and “stability” aren’t often found in the same sentence.

After Trump’s election, bitcoin acted more like a tech stock than gold. Now, however, bitcoin has been “decoupling” from stocks—and even other cryptocurrencies. So maybe the true believers were right.

Maybe, just maybe, bitcoin is a hedge after all.—LB