Bitcoin bull Tom Lee informed on Monday that in the midst of the U.S.-China trade and currency war, cryptocurrency is a hedge against worldwide hazards.
Fundstrat’s founder and study head clarified on “Fast Money” that this year’s “bitcoin did something very exciting. “It’s been really linked with the dollar for the last couple of years,” he said. “For bitcoins, the weak dollar was nice. And risk markets have been really linked. It’s steered away from the dollar this year because the dollar was powerful, bitcoin was up, which is a true break. It’s gone negative on equity market correlation.”
Lee also added that crypto is now “strongly linked with gold” and demonstrated “to be a hedge against worldwide hazards this year.” Gold rose by as much as 2 percent on Monday, reaching its largest level in more than six years as the trade dispute between the U.S. and China deteriorated. Investors are looking for safer assets such as gold, cryptocurrency, and bonds as the equity market is increasingly volatile. Also on Monday, Bitcoin jumped almost 8 percent.
In reaction to the rallying of bitcoin, Lee contributed to the end of “crypto winter” as one of the factors why the currency is now bullish.
“I believe this makes [ crypto ] an authentic source of diversification for the institution. I believe it will help propel it to fresh heights.”
Earlier Monday, in more than a century, China, which historically governed its currency, permitted the yuan to drop to its smallest point. Over 7 per U.S. dollar violated the onshore yuan and traded at 7.04. Since the global financial crisis of 2008, the Chinese currency has not broken over the7-level against the dollar.
The breakthrough of the yuan came after President Donald Trump announced last week that the U.S. is placing tariffs on other Chinese products worth $300 billion, efficient September 1.
U.S. stocks were trading significantly lower following the move as the U.S .- China’s trade war worsened.
Other companies related to cryptography are well placed to make a contribution to the project. In June, Ripple Labs was a member of the steering committee of the Fed’s Faster Payments Task Force. The initiative aims to put in place “a fast, secure and ubiquitous payment network in the United States”.
Tom Lee, co-founder of Fundstrat Global Advisors said the Federal Reserve cut interest rates last week, a move that some experts believe could partly be behind the recent rise in Bitcoin prices.