Bitcoin climbs above $20,000 for first time in 3 weeks

Bitcoin climbs above $20,000 for first time in 3 weeks

The king ofcryptocurrencies was climbing above $20,000 for the first time in three weeks, with the price of the currency going up Tuesday morning.

According to Kaiko Research, its returns are moving more to gold at the same time. Its 30 day performance now sits at a high that has not been seen in over a year, raising the question whether investors view it as a safe haven.

Is there a chance that a coin, like gold, will be viewed by investors as an inflation hedge?

The BTC-USD fell by 58% year to date, losing more than $500 billion in market cap value, with the majority of the decline occurring from April to July. The big slump was caused by central bank's decision to goose interest rates and tame inflation.

The price of cryptocurrencies is $20,100, a 4% rise over the past 7 days and more than 4% higher over the last three months. Following its major selling events in the second quarter, the largest digital coin and other digital coins have held up better than stocks and gold.

Analysts aren't ready to say the trend indicates that bitcoin's status as a risk-on asset that trades closest to stocks is meaningful - even though they admit its higher correlation to gold could be an encouraging sign for investors seeking portfolio diversification.

The price of gold hasn't held up well under the past year's inflation. From January to March, gold GC F rose 11% to a peak of $2,040 per ounce. It has fallen 14% to $1,708, a 5% drop over the past 6 months, according to Yahoo Finance charts. The most recent U.S. inflation reading for August came in higher than expected, at 8.3%.

Even if it isn't serving as a safe haven, it's proven to perform better than gold and stocks over the past three months, and more recently it's not outside the realm of possibility that some investors might be seeking it to escape volatility in other assets.

Since July 1,Bitcoin has gone up by more than 4%, while gold is down by more than 3%, the S&P is flat and the dynamic is showing a slight rise of 1.2% over the past year, according to director of research with Kaiko.

The equities market is looking at it as a safe haven, but it is too soon to declare investors are looking at it as a safe haven, according to Medalie.

She said that bothGold andBitcoin have performed poorly as a safe-haven asset this year, despite a strengthening U.S. Dollar and their correlation is more likely linked to Bitcoin's low volatility.

A break with stocks could be the effect of bitcoins leading or lagging equities Oanda's Moya said. Leading doesn't mean outperforming. It distinguishes the timing for when two assets move in the same direction.

Following a rally on Monday across equities, the trend flipped yesterday with the help of criptocurrency.

There are not yet signs of strong retail interest in the cryptocurrencies trading volumes, although they are still low. The store-of-value thesis is going to be more mainstream, according to Acheson. I'd like to see higher volumes as well as higher retail participation. David Hollerith is a senior reporter at Yahoo Finance, covering the criptocurrency and stock markets.