Bitcoin's tumble amid Russia's Ukraine invasion shows it's not the gold-like safe haven some investors think it is

• The view that bitcoin may be digital gold is being tested again amid Russia's invasion of Ukraine.
• The cryptocurrency fell as much as 9% Thursday while gold jumped to its highest in over a year.

$4 of Ukraine has perhaps dispelled a popular notion about bitcoin — maybe it's not the gold of the 21st century.

Bitcoin, the largest cryptocurrency by market capitalization, dropped $4 Thursday after Russian President Vladimir Putin launched an attack on Ukraine overnight. The cryptocurrency moved in conjunction with $4, which slumped, as opposed to gold, which jumped 3% to its highest in over a year.

The yellow metal has long been viewed as a safe-haven for risk-averse investors in times of high inflation, market turmoil, and geopolitical crises. That theory has held true as gold ETFs just saw their $4 since the trough of the pandemic, according to Vanda Research.

Proponents of bitcoin, meanwhile, have touted the cryptocurrency as a form of "digital gold" that would act similarly to the precious metal. That's because, like gold, bitcoin has a limited supply. There are about 19 million coins already in existence and only 21 million are ever supposed to be minted.

Backers of the digital-gold concept were vindicated last October when huge inflation numbers caused the cryptocurrency to $4. Shortly after, however, the theory wavered when its price plummeted the following month. The recent market turmoil brought on by the invasion of Ukraine and Western sanctions on Russia put another crack in the theory — gold prices have rallied and bitcoin has not.

February 21 $4 showed the correlation between the price of gold and bitcoin was at its lowest since the middle of 2021. One bitcoin was worth only $4, compared to a high of 37 ounces in October, the data showed.

Despite the current decline, $4 CEO Michael Saylor, a major crypto proponent, has held onto his belief that bitcoin remains a good bet amid geopolitical uncertainty.

On Wednesday, $4, "Nation state conflicts create uncertainty, constrain production, weaken currency, cripple trade, and undermine credit, making investments in debt & equity riskier and underscoring the benefit of converting treasury assets into pure digital energy. #Bitcoin."