According to analysts at Bank of America, bitcoin is not a good hedge against inflation because it does not correlate with gold, but due to its interaction with the stock market, it can be assumed that it is increasingly traded as a risky asset, writes Business Insider.

According to a new report from Bank of America, investors should not consider BTC as a hedge against inflation because it no longer resembles “digital gold” as it did at the beginning of the pandemic. Recall that in March 2020, the correlation between BTC and gold rose sharply as the U.S. Federal Reserve’s stimulus measures and inflation fears boosted demand for bitcoin. But since then, that link has all but disappeared and the correlation is now close to zero, according to analysts at the bank led by Alkesh Shah.

Now, the correlation between BTC and the S&P 500 and Nasdaq 100 has risen significantly since July 2021 and reached an all-time high in late January this year, suggesting that the digital coin is trading more as a risk asset than as an inflation hedge.

Compared to other assets, including gold, the price fluctuations of this cryptocurrency remain extremely high.

Bitcoin experienced huge fluctuations at the end of 2021 and since the beginning of the new year: it fell more than 50% from its November high of $69,000. Today, it has partially recovered and is currently worth around $44,100.