Bitcoin rallies to within 1% of all-time high, gaining safe-haven status during shutdown

Bitcoin rallied on Friday to within striking distance of its record high as the U.S. government’s shutdown entered its third day.

The world’s oldest cryptocurrency is trading up roughly 2% on the day at $123,874. That’s about 1% below its all-time high price of just north of $124,000, which it reached in mid-August.

Investors are flocking to the decentralized asset after U.S. lawmakers failed to strike a deal on federal funding, forcing the U.S. government to shut down on Wednesday. Bitcoin surged 12% this week alone.

“The shutdown matters this time around,” wrote Standard Chartered’s Geoff Kendrick. “During the previous Trump shutdown (22 Dec 2018 to 25 Jan 2019) Bitcoin was in a different place than now, so it did little.”

“However, this year bitcoin has traded with ‘US government risks’ as best shown by its relationship to US treasury term premium,” added Kendrick.

Standard Chartered expects a new high soon and ultimately the crypto hitting $135,000 after that.

Traders are turning to crypto and other assets to hedge against mounting political and economic tensions. Spot gold rose 0.5% to $3,876.55 per ounce on early Friday, with prices gaining more than 2% this week.

Traders also poured some money into stocks on Friday, despite the increasing geopolitical uncertainties. The S&P 500 and Nasdaq Composite also rose 0.5% and 0.27% on the day, respectively.