Periods of market volatility or geopolitical crisis are never enjoyable experiences for investors. However, the one silver lining for investors is that we can understand a lot about an asset's supply and demand dynamics based on how it acts and reacts under these circumstances.

For example, one of the best examples was how gold acted during the financial crisis in 2008. Essentially, gold turned out to act like any other financial asset during the panic as the metal experienced liquidation pressure. In contrast, the dollar and Treasuries saw inflows during the panic. Thus, it's not surprising that over the next decade, gold underperformed despite several bullish catalysts like a dovish Fed, high-interest rates, and limp economic growth.

The newest asset class on the block is cryptocurrencies with bitcoin being the largest and most significant especially in terms of institutional activity. There are 2 major use cases for bitcoin with one being it being the next major currency or technical breakthrough, while the other case is that bitcoin is sort of a 'digital gold' which offers protection against inflation and like gold should function as a 'store of value' or a 'store of wealth'.

If the latter logic is correct, then we would expect bitcoin to outperform during the Russia-Ukraine crisis, especially with the recent news that Russia was going to be kicked out of the international SWIFT banking arrangement. Many think this could increase demand for cryptocurrencies as Russians look to move out of the ruble which is expected to plunge in the coming weeks.

Prior to this, bitcoin had been under pressure due to the Federal Reserve's tightening and the selloff in tech and growth stocks. It's all-time high was in November of last year just above $68,900. From there, bitcoin declined by 52% to reach a bottom on January 24 just under $33,000. From there, it had a modest bounce before starting to decline as the crisis took hold, leading to a successful retest of these lows.

Therefore, based on this, it's fair to conclude that bitcoin is not acting like an asset that is a 'store of value' that offers protection against inflation or geopolitical risk. Instead, it's acting like a very 'risk-on' asset that trades in tandem with other tech stocks.