Bitcoin is becoming a safety trade in this market, says crypto bear Peter Boockvar

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Bitcoin one of the few hideouts in market

Investors are flocking to bitcoin as uncertainty looms on Wall Street.

The cryptocurrency's meteoric bounce this year could be a sign that it's becoming somewhat of a safe haven amid increasing volatility in the stock market, Bleakley Advisory Group's Peter Boockvar said Tuesday on CNBC's "Futures Now." It was trading at more than $8,700 earlier this week and was above $7,800 on Wednesday morning. 

"I watch bitcoin as a signal, as an indicator, not because I want to own it," said Boockvar, a noted crypto bear. "Over the last couple weeks, we've seen this sharp rise in bitcoin, and to me, that was saying something in terms of what markets were thinking about what the Fed was going to do [and about] the turmoil created by the threatened tariffs."

With the market now anticipating the Federal Reserve to cut interest rates twice before the end of 2019, and the Trump administration escalating its multifront trade war, traditional "safe havens" like gold — Boockvar's preferred safety play — and the U.S. dollar are also gaining momentum.

Boockvar, Bleakley's chief investment officer, pointed out that bitcoin began to rally before gold did, an intriguing move that might speak to the digital currency's status as a real, if not-yet-proven, alternative to stocks.

"I still think it's in its infancy, and I only bring it up here because we saw a short move over the past month that I was thinking, well something is causing this," he said. "I don't recommend bitcoin in either direction because I don't really care for it in terms of an asset, but I do care for it as a signaling mechanism that I think was a tipoff to this bounce in gold."

"From here on, can bitcoin be a safe haven as much as gold? I don't know yet," he said. "But, again, I'd still rather own gold either way."

Gold — which held near a three-month peak Tuesday — harbors some intrigue of its own, Boockvar said. He noted that its recent rally occurred at the same time as a rise in the U.S. dollar index, a move that he called "most noteworthy" given their typically inverse correlation.

"Really, the sole bear case on gold is a stronger dollar, and if they both rally together, well, then there's no bear case anymore," he said. "And if the dollar actually falls, well, then gold can really get its legs."

That could play out if Tuesday's rapid rally is what Boockvar believes it is: a "dead-cat bounce," a term used on Wall Street to refer to a short-lived rally in the stock market after a meaningful decline.

"For now, this is just a dead-cat bounce back to around the 2,800 level until you get clarity on China. I don't think Mexico goes anywhere. I think there's no way we would be so stupid to put those tariffs on. To me, it's all about China right now, and I think, from what I see and hear, this thing is going to last a long time."

Stocks had their second-best day of the year Tuesday after Fed Chair Jerome Powell left the door open for the central bank to put through monetary easing if economic conditions were to worsen. The U.S. dollar ticked lower on the news.