Bitcoin rose to its highest level in more than a month as the broader U.S. financial markets sold off Tuesday.
The digital currency was trading near $9,436 as of 4:21 p.m. ET, and has jumped nearly 20 percent in the past week, according to data from Coindesk. Bitcoin is coming off of its worst quarter ever, when it lost roughly 48 percent of its value in three months.
Other financial markets were moving in the opposite direction of the cryptocurrency Tuesday, hurt by rising interest rates and bearish comments from a conference call by Caterpillar, which is often seen as a bellwether for the U.S. economy.
The Dow Jones industrial average closed more than 400 points lower, dropping more than 750 points from its session high to the lows of the day. The S&P 500 fell 1.3 percent, and the Nasdaq composite declined 1.7 percent.
Spencer Bogart, partner at Blockchain Capital, said bitcoin presents an appealing alternative for investors selling on macro-economic news this week.
“Bitcoin remains uncorrelated to traditional asset classes, is more than 50 percent off its highs and has significant upside,” Bogart said. “It feels like a no-brainer from a portfolio management perspective to allocate some capital to crypto.”
News this week that Goldman Sachs made its first cryptocurrency hire, and a Thomson Reuters survey published Tuesday that said one in five firms are considering trading digital currency in the next year, marked a shift in crypto investor sentiment and helped prices, according to Joe DiPasquale, CEO of BitBull Capital.
“As reports continue to show more and more institutions gearing up to participate in crypto markets, valuations are likely to continue to increase in a steady manner,” DiPasquale said. “There has been a significant shift in sentiment towards the positive, with Bitcoin’s spot price seeing the most notable jump over the last week.”
Tom Lee, managing partner and the head of research at Fundstrat Global Advisors, said the Goldman hire is good news for the future of cryptocurrency.
“It’s a sign that a major investment bank thinks there’s enough clarity, custody and money to be made to actually offer that trading service,” Lee told CNBC’s Fast Money Tuesday. “I think it’s a sign that this is becoming mainstream.”
Lee also highlighted an April uptick in Fundstrat’s Bitcoin Misery Index. The index is measured out of 100, and shows how happy or sad investors feel owning bitcoin. In February, the index was around 18 which Lee said at the time was the lowest reading since Aug. 2011. As of this week, the index recovered to around 47, Lee said.
Bitcoin reached its highest level since March 14 on Tuesday but is still down more than 30 percent this year, according to CoinDesk.
Other digital currencies also outperformed the broader markets, and all of the top ten by market capitalization were trading higher Tuesday, according to CoinMarketCap.com. Ethereum, the second largest cryptocurrency, rose 10 percent, while ripple was up more than 7 percent, according to data from CoinDesk.