The debate over whether Bitcoin is a speculative asset or an inflation hedge has been put to the test this week, and the evidence so far is leaning toward the former.

Bitcoin fell along with other risky assets on Thursday as Federal Reserve Chairman Jerome Powell made it clear that the central bank will stick to its accommodative monetary policies even as interest rates start to rise.

As rates spike and signs of inflation start to emerge, investors might look to hedge their risk against inflation–in particular, the “money printing” going on at the Fed. But for now, Bitcoin doesn’t seem like much of a hedge, as some leaders in the finance and business worlds suggested it would be. After rising above $51,000 on Wednesday, Bitcoin fell sharply on Thursday after the Fed’s speech and was trading closer to $49,000 on Friday.

To be sure, rising long-term interest rates aren’t the same as inflation, so the current market weakness may not be a fair test for Bitcoin. Inflation hasn’t yet shown up in the U.S. economy, and it may not come to pass even with loose monetary policies at the Fed. 

Also, market signals are mixed–and even downright strange–right now. The dollar has been rising, and so has oil. The two usually move in opposite directions. Other supposed inflation hedges like gold have also underperformed in recent days. Gold futures have fallen on each of the past three days.

Bitcoin may eventually work better as an inflation hedge, or investors may accept it as a way to diversify their portfolios even if it’s not a great inflation hedge.

“Bitcoin’s nearly complete lack of meaningful correlations with other assets presents it as a diversifier, but given its high volatility, we think adding it to a portfolio is more about returns than diversification, particularly considering the headline-grabbing nature of its moves of late,” wrote RBC Capital Markets Christopher Louney in a note explaining why Bitcoin and gold aren’t great substitutes for each other.

Companies that own Bitcoin or are involved in the industry have also been falling. The Amplify Transformational Data Sharing ETF (ticker: BLOK), created by Toroso Investments to track some of those companies, has fallen 13%  since Monday’s close. Michael Venuto, the chief investment officer of Toroso, says that investors’ gut reaction this week hasn’t been to bet on Bitcoin. 

“I think it’s the exact same thing that’s happened to gold,” Louney said. “Inflation scared people and money went to cash. It didn’t go into Bitcoin. It didn’t go into gold” because people wanted liquidity in the moment. 

The inflation trade, he notes, can take a while to play out.

“I think just like gold, Bitcoin is not a direct one-to-one inflation hedge,” he said. “Most of the time when there’s inflation, gold underperforms, until we all realize it’s inflation, and then it catches up.”

Bitcoin’s underperformance doesn’t surprise Louney. “You know, Bitcoin is a risk asset. It’s not a pure inflation hedge.” 

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