Bitcoin is no stranger to volatility or even to 30% "pullbacks" in bull markets. But once in a while the market descends into chaos, reviving the debate on whether bitcoin is a risk asset or a safe haven amid tumult. After the benchmark S & P 500 index on Monday dropped 3% in its worst session since September 2022 , and bitcoin fell 10% for its worst day since November 2022, investors and market observers are again questioning the cryptocurrency's store-of-value narrative .
"It's a speculative thing," Nassim Taleb, Universa Investments distinguished scientific advisor and author of "The Black Swan" said on CNBC's "Squawk Box" Tuesday. "Bitcoin proved once again that it's not a hedge against your assets melting." The issue is that bitcoin has behaved as a safe haven before.
It outperformed during the crisis in the traditional banking system last year, for example. At the same time, it's a nascent and risky asset with extreme volatility that traders can benefit from. It's difficult for many to square that circle.
David Glass, an analyst at Citi, reiterated the firm's view that it's premature to crown bitcoin as digital gold . "Despite both gold and bitcoin being limited supply, zero-coupon instruments, the original cryptocurrency does not exhibit gold's 'store of value' properties," he said in a note Wednesday. "Nor has it acted as a safe haven during equity downturns, as exemplified by market moves this past week.
" Since bitcoin's inception there have been 15 months when the S.