To combat fears of a trade war, put your money in bitcoin, said hedge-fund manager and bitcoin bull Brian Kelly.

"[Bitcoin] is the new gold," Kelly said Friday on CNBC's "Fast Money."

"In this environment," Kelly said of fears of a potential trade war, "I want to own those things that are deflationary and fixed supply in an inflationary environment. And look at what bitcoin has done the last couple of days."

Bitcoin is up about 6.5 percent this week, while gold is down 0.7 percent.

In fact, the volatile asset continues to regain some of its February losses. It peaked around $19,500 in mid-December, only to fall below $6,000 last month. Prices hovered just over $11,000 Friday.

Meanwhile, the markets have seen better days. On Thursday, President Donald Trump announced that a 25 percent tariff on steel and a 10 percent tariff on aluminum would go into effect next week, sending both the Dow Jones industrial average and the S&P 500 plunging in fears of possible trade wars.

During a trade war, Kelly said, currencies get weaker, such as the dollar's depreciating value last week, and prices rise.

"Generally speaking, you want to own hard assets," he said.

In the past, said Kelly, who has "like 90 percent" of his money invested in bitcoin, investors would hedge with gold.

"But you know what, now we have bitcoin," he said. "Bitcoin has a fixed supply. It acts exactly like a hard asset, exactly like a commodity."

"In the trade war," he said, "it does well."