Bitcoin hits new record high near $94,000 as Russia-Ukraine tensions escalate

Bitcoin rose on Tuesday even as geopolitical tensions between Ukraine and Russia escalated.

The cryptocurrency rose more than 2% to $93,817, surpassing its previous record set earlier in the session at $93,469.

These moves come after Russia lowered the threshold for using nuclear weapons, after US President Joe Biden allowed Ukraine to use US missiles to strike Russian military targets.

According to CNBC, cryptocurrencies in general and bitcoin in particular have surged in the wake of the US elections and the victory of Donald Trump from the Republican Party, rising by about 33%, while crypto assets have benefited from being a “non-confiscatory” and long-term hedge against growing political uncertainty in the East and West.

“The most important long-term correlations for bitcoin are the negative correlation to the US dollar and the positive correlation to money supply growth,” said Matt Siegel, head of digital assets research at VanEck.

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

Bitcoin is now a safe-haven hedge, having benefited from momentum during recent global crises, and as a risky asset many consider it a short-term asset, bitcoin is still considered an unattractive asset for long-term investments.

Citigroup explained in a note on Monday that bitcoin “as an asset” does not exhibit store-of-value properties, with risky volatility.

“Gold peaked at the end of October, roughly a week before Election Day,” said Alex Saunders of Citigroup. “With risk-on (and bizarre) sentiment supporting cryptocurrencies, and foreign exchange headwinds increasing for gold, there is unlikely to be a strong correlation between the two in the near term.”