What Is Bitcoin Meant to Hedge?

The conversations began on Saturday, after the cryptocurrency tanked nearly 10% — from around $70,000 to below $62,000 — following Iran’s failed missile attack on Gaza. The move inspired a few columns on Monday, including insightful ones from Fortune’s Jeff John Roberts, which put it in context of gold’s 17% rally, andThis is an excerpt from The Node newsletter, a daily roundup of the most pivotal crypto news on CoinDesk and beyond.

There are likely a number of factors at play, including the increasing amount of bitcoin in circulation, number of holders and whales. But in some sense, the answer is clear enough, bitcoin is institutionalized. As“Bitcoin’s volatility has still steadily declined since its launch more than a decade ago. Volatility — as measured by the 100-day average of daily price swings in percentage points — hasn’t exceeded 4.

This may stem from one of the foundational myths of bitcoin, that it is “digital gold.” It’s a flawed metaphor though; good in the sense that an association with gold signaled that BTC could have value but bad in setting up the wrong expectations at a time before anyone really knew how bitcoin would behave.

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