Bitcoin's (BTC) recent sharp pullback from its record high has erased the gains it made since the beginning of the year, and its aggressive price predictions for 2026 have once again been called into question.
Experts suggest that an equally important question to consider is Bitcoin's role within investment portfolios and when it will begin to function as a stable “store of value.”
“It still has to prove itself as a digital store of value with performance over a longer period,” Nate Geraci, President of NovaDius Wealth Management, stated on CNBC’s “ETF Edge” podcast.
The "Digital Gold" Narrative Under Scrutiny
For years, Bitcoin has been frequently described as “digital gold.” This analogy appeals to institutional and individual investors because gold is traditionally viewed as a safe haven that protects portfolios during periods of sharp sell-offs in stocks and other risky assets, exhibiting low correlation with these assets. However, Bitcoin's behavior as a risk-on asset during stock market downturns significantly undermines this “digital gold” narrative.
Following two distinct periods of volatility in 2025, comments suggesting that Bitcoin has failed to provide a clear answer to the digital gold question are gaining prominence. Geraci commented, “The track record so far is mixed.”
Historical Performance and Future Expectations
Geraci highlighted Bitcoin's strong performance during the stock market sell-off known as the “tariff tantrum,” which occurred after President Donald Trump's announcement of sweeping global tariffs in April. He noted that Bitcoin's robust performance during this period, while decoupling from stocks, captured the attention of many investors.
However, he observed that more recently, with weakness in tech stocks dragging the market down, most cryptocurrencies, including Bitcoin, have sold off sharply in tandem with the stock market. Geraci pointed out that Bitcoin, in particular, lost significantly more value than the stock market during the recent downturn. “The jury is still out,” Geraci remarked, adding that a longer dataset is necessary to clarify Bitcoin's role.
In the long term, Geraci maintains his belief that Bitcoin will increasingly evolve towards a behavior pattern more akin to physical gold. Nevertheless, he believes its current movements are still “too young and volatile.” “Bitcoin is essentially like a 15-16-year-old asset,” he explained. “It needs time to prove itself as a digital store of value.” In contrast, he emphasized that gold possesses a history spanning thousands of years and a proven reputation. In a subsequent email to CNBC, he stated, “Bitcoin's story is still in its early stages.”
Market Fluctuations and ETF Impact
Emphasizing the importance of maintaining perspective during short-term fluctuations, Geraci noted that Bitcoin has retreated over 25% since its record high in October, with a peak-to-trough loss of approximately 35%. Despite this, he highlighted that Bitcoin's price has still more than doubled since January 2024, following the SEC-approved launch of spot Bitcoin ETFs.
Spot Bitcoin ETFs have also experienced billions of dollars in outflows in the past month, though they have seen a total net inflow of approximately $22 billion since the beginning of the year. Geraci attributes the recent crash primarily to the sell-off in tech stocks and broader risk aversion in the equity market, but he also noted that high leverage levels within the crypto market played a significant role in deepening the move. “I think there was a lot of leverage in that category that needed to be cleared. That's what we're seeing now,” he added.
Diversification and Other Crypto Assets
Beyond Bitcoin, Geraci suggests that crypto index ETFs could present a promising option for investors, offering them more diversified exposure to the crypto asset class. These products are designed to spread risk by investing in a basket of digital assets rather than concentrating on a single coin.
Still, Geraci singles out Bitcoin within the crypto market. He believes that many other crypto assets are likely to continue behaving like tech stocks: “Setting aside Bitcoin, I view most other crypto tokens as risk assets, much closer to high-growth tech stocks than stores of value. Their investment thesis is more closely tied to the future of stablecoins, tokenization, and the development of decentralized finance,” he stated.