Bitcoin (BTC) vastly outperformed traditional wealth preservation assets during the United States-China trade war, American digital asset manager Grayscale confirmed in research published on June 11.

Updating “Hedging Global Liquidity Risk with Bitcoin” — a report originally from 2016 — Grayscale noted that bitcoin gained 47% in the period from May 5-31. The next best-performing asset, the Japanese yen, gained 2.1%.

In addition, many assets saw a drawdown due to the trade dispute, which is ongoing; the Nasdaq Composite index shed 8.7%, making it the worst performer out of global equities.

Grayscale also noted the depreciation in the Chinese yuan, a factor that others have already said spurred bitcoin’s bull market in May due to local investor uncertainty.

“While the drawdown appears to be in its very early stages, Bitcoin is getting a jump before these risks are fully reflected in other asset prices,” the company’s director of investments and research, Matthew Beck, commented.

The findings capitalize on a trend that has seen bitcoin gain from geopolitical instability at various points this year. As Cointelegraph reported, events such as Brexit appeared to exert a similar effect on the cryptocurrency’s price.

While admitting bitcoin is still young for a hedging asset, Grayscale nonetheless confirms belief in its future potential.

“While it is still very early in Bitcoin’s life cycle as an investable asset, we have identified evidence supporting the notion that it can serve as a hedge in a global liquidity crisis, particularly those that result in subsequent currency devaluations,” Beck concluded.

At the same time, theories about bitcoin’s price rally in May also lean towards the non-political, such as investors notionally experiencing FOMO (fear of missing out) after April’s initial surge.

Cryptos feed

Latest Crypto News & Analysis

Editors’ Picks

BTC/USD bulls fight for every inch of the ground on their way to $10,000

After a sharp sell-off at the beginning of the week, BTC/USD climbed back above $9,000 and made its way above another important resistance $9,300. A shall green candle on a weekly chart is a promising signal, though the market is still gripped with uncertainty at this stage. 

More Bitcoin News

XRP/USD drops below $0.2000 after a failure at $0.2030

XRP/USD tested the intraday high at $0.2031, but the strong resistance located around this area discouraged the short-term bulls and pushed XRP/USD below $0.2000 by press time.

More Ripple News

ETH/USD breaks out into the $220 zone, will it be $230 or $210 next?

Ethereum price followed in the footsteps of the largest cryptocurrency by market capitalization, Bitcoin. BTC sprung upwards and for the first time in seven days, stepped above $9,600.

More Ethereum News

EOS/USD slumps below 4-hour SMA200, focus on $2.54

EOS/USD attempted a recovery above 4-hour SMA200 (currently at $2.65) and touched the intraday high at $2.67. However, the upside momentum proved unsustainable as the price of the digital asset dropped to $2.62

More EOS News

BEST CRYPTO BROKERS/EXCHANGES

Bitcoin Weekly Forecast: BTC/USD bulls fight for every inch of the ground on their way to $10,000

After a sharp sell-off at the beginning of the week, BTC/USD climbed back above $9,000 and made its way above another important resistance $9,300.

Read the weekly forecast

BTC

ETH

XRP