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Published: Feb 28, 2022 5 min read

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Photo collage of Putin superimposed over a Bitcoin
Money; Getty Images

One of Bitcoin's biggest selling points is that it's supposed to be "digital gold" — a hedge against inflation and a safe haven when other assets, like stocks, are tanking. But the cryptocurrency market volatility we've seen stemming from the war in Ukraine is hurting that argument.

The stock market has had a tumultuous few weeks as the Russia-Ukraine conflicted escalated and Russia eventually invaded Ukraine last week. The S&P 500 marked its first correction since the beginning of the pandemic, and the Dow Jones Industrial Average and Nasdaq Composite also saw price swings as investors tried to make sense of the constant stream of news. This comes after a rough start to the year for stocks in general as investors prepare for an anticipated interest rate hike.

But Bitcoin's price hasn't provided crypto holders relief. During the first two months of 2022, Bitcoin's price has seesawed between $34,000 and $45,000 per coin, a far cry from its high of $68,000 in November. On Monday, Bitcoin prices initially dropped from $39,000 to $38,000, before popping back up and trading at around $41,000 by midday. Other cryptocurrencies, like Ether, have also experienced rollercoaster-like price movements.

"The recent performance of Bitcoin and other cryptocurrencies reinforces that they are risk assets — and high-risk assets at that — and not safe haven assets," Robert Johnson, professor of finance at the Heider College of Business at Creighton University told Money via email.