Bitcoin rises to a new record as investors absorb growing Ukraine-Russia tensions

Bitcoin moved higher Tuesday, at one point breaching $94,000 for the first time, amid rising geopolitical tensions between Ukraine and Russia.

The price of the flagship cryptocurrency was last higher by more than 1% at $92,616.00, according to Coin Metrics. Earlier, it rose as high as $94,068.75. Shares of MicroStrategy, which trade as a bitcoin proxy, rose 11.9%.

The move follows overnight reports that Russian President Vladimir Putin warned the U.S. that the threshold for the use of nuclear weapons had come down in response to President Joe Biden allowing Ukraine to use U.S. missiles to strike military targets inside Russia. Initially, bitcoin moved higher while stocks sold off. In afternoon trading, however, bitcoin advanced further as the S&P 500 and Nasdaq Composite erased losses.

Bitcoin is up 31% for the month. It has benefited from traders’ recent enthusiasm for cryptocurrencies following the election, as President-elect Donald Trump is expected to install more crypto-friendly regulators that could help the industry reach greater success. Like gold, bitcoin is also seen by many investors as a “non-confiscatable,” long-term hedge against geopolitical uncertainty.

“The most significant long-term correlations for bitcoin are a negative correlation with the U.S. dollar and a positive correlation with money supply growth,” Matt Sigel, head of digital assets research at VanEck, said Oct. 28 on CNBC’s “Squawk Box.”

“Bitcoin is a chameleon,” Sigel added. “Its correlations change over time; it’s hard to predict what it’s going to be correlated with over the short term.”

Bitcoin has behaved as a safe haven before. It outperformed during the crisis in the regional banking system in early 2023, for example. But because bitcoin is also a risky asset without a long history, with extreme volatility that can benefit short-term traders, some have a hard time arguing that bitcoin is necessarily attractive forever. Citigroup, for example, in a note Monday reiterated the bank’s view that bitcoin doesn’t exhibit store-of-value properties.

“Gold peaked by October-end, nearly a week prior to Election Day,” Citi’s Alex Saunders wrote. “And with risk-on (and idiosyncratic) sentiment supporting crypto, and FX/rates headwinds building for gold, the two are unlikely to be strongly correlated in the near-term.”