Bitcoin bull Tom Lee told CNBC on Monday that cryptocurrency is a hedge against global risks, amid the U.S.-China trade conflict and currency war.
"Last couple of years, it's been really correlated to dollar." he said. "Weak dollar has been good for bitcoins. ... And it's been really correlated to risk markets. This year, it's steered away from the dollar because dollar's been strong, bitcoin's been up, which is a real breakage. It's gone negative on correlation to the equity markets."
Lee also added that crypto is now "positively correlated to gold" and it proved "itself this year to be a hedge against global risks."
Gold surged as much as 2% on Monday, reaching its highest level in more than six years as U.S.-China trade conflict worsened. Investors are seeking safer assets like gold, cryptocurrency and bonds as the equity market is growing more volatile. Bitcoin also jumped nearly 8% on Monday.
In response to bitcoin rallying, Lee contributed "crypto winter" being over as one of the reasons why the currency is now bullish.
"I think that makes [crypto] authentic institutional source of diversification. I think that's gonna help it propel to new highs."
Earlier Monday, China, which has historically controlled its currency, allowed the yuan to fall to its lowest level in more than a decade. The onshore yuan breached above 7 per U.S. dollar and traded at 7.04. The Chinese currency has not broke over the 7 level against the dollar since the global financial crisis in 2008.
The yuan's breakthrough came after President Donald Trump announced last week that the U.S. is putting 10% tariffs on another $300 billion worth of Chinese goods, effective September 1.
Following the move, U.S. stocks were trading sharply lower as the trade war between the U.S. and China intensified.