Bitcoin’s latest crash shows crypto is no haven during wartime

Bitcoin took a sharp tumble on Saturday amid a frightening uptick in geopolitical tensions. Following news that Iran’s fundamentalist rulers had launched a massive air attack on Israel, the price fell from around $70,000 to $62,000—a more than 10% drop—while some altcoins plunged 15% or more. Crypto markets rebounded slightly on reports Israel and its allies shot down over 99% of the incoming drones, cruise missiles, and ballistic missiles, but Bitcoin was still trading closer to $65,000 by Monday morning.

While the crisis appears contained, at least for now, the scary episode serves a fresh challenge to one of the crypto world’s favorite narratives—that if the world goes to hell and countries collapse, Bitcoin will flourish as a store of value. Instead, as the weekend’s sudden price drop showed, investors are more inclined to dump Bitcoin than to buy it. Meanwhile, gold—which many view as the original and ultimate store of value—ticked up at the height of the weekend’s crisis.

It’s true that Bitcoin’s sudden drop was fueled by a wave of liquidations as traders, some of whom were leveraged 50x or more, couldn’t cover their positions after prices first dipped on the war news, which led to still more selloffs. In contrast to these short-term traders, there are many more people holding Bitcoin for the long term—and it’s a safe bet few of them sold or were even tempted to do so.

Still, this doesn’t change the fact that amid the latest geopolitical crisis, more people chose to sell Bitcoin than buy it. The broader market treated Bitcoin as a risky asset to flee in favor of traditional safe havens like gold, bonds, and the U.S. dollar. Regardless of whether the broader market view is correct, that’s what happened when Iran started firing missiles.

Even though Bitcoin, for now at least, can’t claim to be an economic safe haven, this weekend’s events show that the crypto markets may serve as something else—an early warning signal. Unlike traditional markets, crypto exchanges operate around the clock. Meanwhile, many people in the crypto world follow geopolitical events closely. These conditions mean that crypto prices are among the first to respond to major news events and, when those events occur outside market hours, could serve as a good predictor for what will happen at the opening bell. No doubt people are already working on trading algorithms to do just that.

Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts

This story was originally featured on Fortune.com