Stocks, oil and industrial metals were nursing losses. Prices for gold, seen as a traditional safe-haven asset or inflation hedge, rose. The yield on 10-year U.S. Treasury bonds slipped two basis points, or 0.02 percentage point, to 1.62%. Falling yields on the U.S. government bonds are often taken as a sign of risk aversion.

The declines in traditional markets were nowhere near the 12% slide in prices for bitcoin (BTC, -8.46%) (BTC), the largest cryptocurrency. Ether (ETH, -17.72%) (ETH), the second-biggest, tumbled 19%.

But the dour sentiment hitting cryptocurrency markets might reflect the nagging concerns witnessed in traditional markets.

“If anything, we would assign investor worry around rising inflation risk and the impact this is having on stocks as a more legitimate reason to reconcile weakness in crypto,” Joel Kruger, cryptocurrency strategist at LMAX Digital, said in an email. “Crypto is considered to be an emerging market, and as such, a risk correlated market vulnerable to downturns in global sentiment.”

While the jury is still out on whether bitcoin is digital gold or a risk asset, the cryptocurrency’s current price action suggests it’s anything but a haven or store of value asset.

Bitcoin fell as low as $30,000 on Coinbase early today and was last seen trading near $37,000 at press time, representing a 13% drop on a 24-hour basis.

The Standard & Poor’s 500 Index of large U.S. stocks was trading 1% lower. Oil was off 3% and copper was nursing a 3.3% loss. Gold was bid 1% higher at $1,880 per ounce.

Concerns that the Federal Reserve might have to scale back its efforts to stimulate the economy have grown as the distribution of coronavirus vaccines leads to business reopenings and a resumption in travel and potentially hiring. Investors say that an uptick in hiring, spending and activity could combine to push wages and consumer prices higher.

A Bank of America report published last month showed inflation worries spreading beyond crypto markets and bond markets to Wall Street. A week ago, the U.S. government reported that its Consumer Price Index (CPI), which measures a basket of goods, energy, and housing, rose 4.2% in the 12 months through April, the most since 2008.

The renewed inflation scare has boded well for gold but not for bitcoin. Since early April, the yellow metal has rallied by 12%, while bitcoin has declined by more than 35%.

Bitcoin’s ugly performance during a shift from low inflation to high inflation environment has weakened the popular narrative of the cryptocurrency being a superior store of value asset than gold.

“We were always of the opinion that the biggest misconception out there is that BTC is a safe haven (or inflation hedge),” QCP Capital said in its Telegram channel. “The moves in the last few months validate this entirely.”

One possible explanation for bitcoin’s poor performance could be the recent uptick in the odds of an early interest rate hike by the Fed. A rate hike dilutes the appeal of perceived inflation hedges.

However, gold has managed to stay bid despite rate hike bets, possibly because the dollar, the yellow metal’s biggest nemesis, has taken a beating in recent weeks.

The dollar index, which tracks the greenback’s value against majors, has dropped from 9.3.40 to 89.80 in the past six weeks, reversing the entire first-quarter gains.

Bitcoin largely moved in the opposite direction to the dollar index last year and in the first quarter. However, the recent weakness in the dollar index hasn’t brought cheer to the cryptocurrency.

“The BTC enthusiasm has been sucked out last week by the confluence of Elon’s corporate ESG stamp of disapproval, the SEC’s public un-enthusiasm for any ETF & the CME backwardation,” QCP noted.

Also read: Bitcoin Drops to $36K, Triggering $8B in Liquidations