The world’s largest digital currency, bitcoin, has soared this year amid its popularity among Wall Street investors.
That has led some analysts to argue that the cryptocurrency could help boost the value of the U.S. dollar.
But the stock market’s performance has been driven largely by investors using bitcoin as a hedge against volatility in currencies and other asset classes, including gold and oil.
Some of those same investors are betting on the value or growth of the dollar to push up the value and share prices of U.N. agencies and other global companies.
“If you look at the S&P 500, it’s been on a steep downward trend for years,” said Matt Biesman, chief market strategist at Citi.
“We’ve been looking for a return to some kind of return in the U.”
While bitcoin’s rise has been accompanied by a surge in the value for the dollar, Biesmann said that it’s a “huge opportunity” for the currency.
It could be used to buy shares of big U.K. and German companies, for example.
In addition, bitcoin’s recent gains could fuel a broader global rally in the market, Biedman said.
“I would say it’s in the ‘hot seat,’ but I would not be shocked if we hit some kind and that could have a lot of ripple effects across the world,” Bieseman said.
Bitcoin’s rise in popularity has led to speculation that the digital currency is a better bet for investors.
But Biesmans view is that its market capitalization, at $3.7 trillion, is far too small to make any kind of significant impact.
“It’s still relatively new, so it has to grow and improve in order to really be a major force,” Biedmans said.
The price of bitcoin has risen more than 40 percent this year.
But it’s unclear how big an impact bitcoin could have on the U