Bitcoin (BTC) far surpassed traditional asset protection assets during the US-China trade war, American digital asset manager Grayscale confirmed in a study published on June 11th.
In an update to Hedging Global Liquidity Risk with Bitcoin – a 2016 report – Grayscale found that Bitcoin was up 47% in the period May 5-31. The next best performance, the Japanese yen, rose 2.1%.
In addition, many assets were drawn due to the ongoing trade dispute; the Nasdaq Composite Index lost 8.7%, making it the worst performer among global stocks.
Grayscale also noted the devaluation of the Chinese yuan, a factor others have said fueled Bitcoin’s bull market in May due to uncertainty among local investors.
“While the drawdown seems to be in its very early stages, Bitcoin is making a leap before those risks are fully reflected in other asset prices,” commented the company’s director of investments and research, Matthew Beck.
The results are based on a trend that Bitcoin has benefited from geopolitical instability at various times this year. As Cointelegraph reported, events like Brexit appeared to have a similar effect on the price of the cryptocurrency.
While admitting that Bitcoin is still young as a hedging asset, Grayscale nonetheless affirms belief in its future potential.
“While it is very early in the life cycle of Bitcoin as an investable asset, we have found evidence that it can serve as a hedge in a global liquidity crisis, particularly those that lead to subsequent currency devaluations,” Beck concluded.
At the same time, theories about the Bitcoin price rally in May also lean towards the apolitical, such as investors fictitiously experiencing FOMO (fear of missing out) after the first surge in April.