The digital currency bitcoin jumped to a fresh all-time high Thursday as global investors looked for safe haven trades. Increased interest from Asia also helped boost the digital currency.
Bitcoin rose more than 3.5 percent to hit a record of $1,875.08, according to CoinDesk.
One of the reasons for the move was “buying as a hedge against political chaos,” said Brian Kelly, CEO of BKCM, which runs a digital assets strategy.
Bitcoin three-month performance
Major stock markets dropped in the last two days as separate reports of potential scandals in the U.S. and Brazilian presidencies rattled investors.
The S&P 500 fell Wednesday in its worst day since September on growing worries that U.S. President Donald Trump might face legal issues and not be able to fulfill his promises of tax reform, deregulation and infrastructure spending. A late Tuesday night report alleged Trump asked recently fired FBI Director James Comey to “let go” of an investigation into former national security advisor Michael Flynn.
Then Wednesday evening in Brazil, the O Globo newspaper reported that Brazilian President Michel Temer in March allegedly discussed bribing former House Speaker Eduardo Cunha to prevent him from testifying about a massive corruption case.
The Brazil Bovespa plunged more than 8 percent Thursday in its worst day since October 2008. U.S. stocks steadied Thursday.
Temer said Thursday afternoon that he will not resign and he will prove his innocence in the Supreme Court, according to a Reuters report.
Brazil has a “decent bitcoin community there already,” said Chris Burniske, blockchain products lead at ARK Investment Management.
To be sure, some investors would not consider a volatile asset like bitcoin a “safe haven,” but Kelly and others believe the digital currency has a chance at challenging gold as a go-to safe store of value in turbulent times. Gold futures are up almost 2 percent in the last one week.
Other factors driving bitcoin’s price higher included increased demand from Japan and South Korea. Bitcoin trade volume in both country’s currencies rose slightly from prior days, bringing Japan’s share to about 40 percent, up from near 36 percent, and South Korea’s to about 5.6 percent from roughly 5 percent, according to CryptoCompare.
Both countries are set to open up trading to retail investors in the next few months, Kelly said.
Overall interest in bitcoin has risen in the last month as the future of the technology supporting the digital currency appears more stable. The often volatile currency has a market capitalization of $30.8 billion, according to Coinmarketcap.com.