The price of a bitcoin surged as much as 8.7 percent on Friday to $680.19, according to CoinDesk. That followed the Brexit vote, which sent the pound spiraling downward against the U.S. dollar to $1.32, the lowest since 1985.
Bitcoin is not for the faint hearted. It started the year around $430, sank below $360 in mid-January, jumped to $768 in mid-June and then plunged to $603 a week later.
“I’m not a big proponent of bitcoin as a currency replacement,” said Steve Waterhouse, a partner at San Francisco-based Pantera Capital, a bitcoin investment firm that started in 2013.
Waterhouse, a native of England, said bitcoin is most effectively used for business-related transactions and money transfers that would take several days to clear in the traditional financial world but can be done digitally with bitcoin on the same day.
Waterhouse said that bitcoin as an investment makes sense in countries with particularly strained economies, like Greece, Spain and Argentina. Separatist actions like the Brexit and some of the policies proposed by Donald Trump lend credence to the idea of putting money into an uncorrelated asset.
The SP 500 dropped 3.6 percent on Friday, and the pan-European STOXX 600 index closed down around 7 percent lower on the day.
“If nothing else looks safe, you could see people looking to something completely different as a safe haven,” Waterhouse said. “It doesn’t follow the ups and downs of regular markets.”