Bitcoin rallied about 1.6% Friday, coming close to setting a new record despite widespread economic uncertainty.
The cryptocurrency traded at over $122,000 – just below the all-time high of about $124,000 that it notched in August.
The rally is a signal that investors may be viewing Bitcoin as another safe-haven asset, like gold, as the US government shutdown continues.
Spot gold jumped 0.5% early Friday to $3,876.55 per ounce. Prices have gained more than 2% this week – and gold futures have soared over 46% so far this year.
“That correlation with gold has picked up. Bitcoin is often thought of as digital gold because of its limited supply,” Alex Saunders, Citi’s head of quant macro research, told CNBC’s “Closing Bell Overtime” on Thursday.
Meanwhile, experts and pols are lamenting the adverse effects of the shutdown, with Treasury Secretary Scott Bessent warning Thursday of potential harm to economic growth.
“The shutdown matters this time around,” Standard Chartered’s Geoff Kendrick wrote in a note Friday.
“During the previous Trump shutdown… Bitcoin was in a different place than now, so it did little,” he added. “However, this year bitcoin has traded with ‘US government risks’ as best shown by its relationship to US Treasury term premium.”
Standard Chartered expects Bitcoin to hit a new high soon, ultimately reaching $135,000.
The Dow Jones Industrial Average rose 310 points, or 0.7%, while the S&P 500 ticked up 0.1% on Friday.
