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 & P 500 fell over 5%, he pointed out. In those times, bitcoin rallied just twice, with median returns being around -12.7%, while gold returns were close to flat on average. Investors seek quick liquidity in a panic “When markets are in such a panic mode – think about the coronavirus dump in March 2020 – it’s always a case of ‘sell now, think later,’ so we shouldn’t look to interpret bitcoin’s 10% dump Monday as proof it isn’t working as a hedge against uncertainty,” said Antoni Trenchev, co-founder of crypto exchange Nexo. Matt Hougan, chief investment officer at Bitwise Asset Management, which oversees the Bitwise Bitcoin ETF (BITB) , pointed out that investors sold gold during the 2008 financial crisis. “People will sell anything that’s liquid during a market crisis,” he told CNBC. “This [latest] crisis hit on a weekend when most markets were closed.” Crypto trades 24 hours. “It is a great hedge asset during times of uncertainty, if you’re willing to hold it for more than a day – for months, for quarters, for years,” he added. “That’s what we’ve seen during every previous crisis: It always falls … and then every time it has recovered and played its role.” But recent volatility in bitcoin shows there’s a healthy market that isn’t buying into bitcoin’s HODL (“hold on for dear life”) culture and instead is trading the asset, Liz Young Thomas, head of investing strategy at SoFi, said on CNBC’s “Squawk Box” Tuesday. “You don’t want to see that kind of volatility in an asset class that’s expected to be a store of value,” she added. A hedge with some risky attributes Investors may be forgetting the original context, however. Yuya Hasegawa, crypto market analyst at Japanese bitcoin exchange Bitbank, told CNBC the safe-haven narrative is “misleading” and specified that bitcoin works “as a hedge against fiat currency [debasement], but it still is a risk asset.” That argument is more in tune with the original vision of the Bitcoin network , which was created as a peer-to-peer electronic cash system and includes the native currency bitcoin. The cryptocurrency may have failed as a digital cash alternative for small daily purchases. However, it was designed to maintain a fixed supply of 21 million to ensure scarcity, which has made it appealing to some as a store of value over long periods of time. “In the long run, I believe it is better to hold bitcoin than any fiat currencies, but investors tend to sell high-volatility assets first when risk arises,” Hasegawa added. Noelle Acheson, economist and author of the “Crypto is Macro Now” newsletter, sees the diversity of bitcoin’s narrative as a strength. “It is a hedge against uncertainty,” she said. “It’s also a risk asset and it’s also a play on rates. It’s a lot of things. That’s, in a way, why [it] tends to have a more solid floor than other risk assets like equities.” “Value investors will see $55,000 as a very good price to take a position, especially if bitcoin is, longer term, going to be a hedge against the building confusion in the world,” Acheson added. —CNBC’s Michael Bloom contributed reporting