Byrne Hobart, a CoinDesk columnist, is an investor, consultant and writer in New York. His newsletter, The Diff (diff.substack.com) covers inflection points in finance and technology. 

Bitcoin (BTC) was designed for many reasons, but one of the most important was to be a safe-haven asset during times of financial distress. From the genesis block’s coinbase parameter (“The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”) to today, bitcoin’s fans have treated it as something worth owning when the market goes crazy.

So it’s disappointing, to say the least, that after the fastest market rout in recent history, an asset built to be a safe haven … dropped 31 percent while the S&P dropped by a quarter. The daily correlation between the S&P and bitcoin went from slightly negative in February to 0.6 in March. Bitcoin barely responded to the Federal Reserve cutting rates to zero, and shrugged off other monetary interventions.

See also: As This Crisis Worsens, Bitcoin Will Become a Safe Haven Again

This is painful to anyone who owns bitcoin, especially to anyone who bought it as a hedge against exactly this kind of sell-off, and exactly this kind of central bank response. The money printer went brrr, and yet the store-of-value lost value.

What’s going on?

When we talk about safe-haven assets, we’re really talking about three different kinds of assets, for three kinds of scenarios:

Safer versions of risky bets, of the sort you’d invest in to hedge against a mild recession. These might include less-levered companies in a given industry, high-margin companies, corporate bonds rather than equities or any investment in a consumer staples company. When the economy shrinks, it’s bad news for companies in the champagne and luxury hotel business, but doesn’t really dent sales of toothpaste and canned food.

Assets people borrow during good times: Yen and U.S. Treasurys are classic safe assets, in part because investors borrow them to make other bets. If you buy a 10-year corporate bond, you’re making a bet on the creditworthiness of the company, and a bet on interest rates. Most of the people who are good at credit analysis are not experts in predicting the future course of monetary policy, so many of them buy the corporate bonds and bet against Treasurys of the same maturity to control their interest rate risk.

The yen is a similar case: Since yen rates have been so low for so long, a classic forex trade is to borrow yen and invest in a currency with higher rates. In both cases, when the trade unwinds –when you sell your corporate bond or close out your bet on the Turkish lira or the South African rand, you end up buying the safe asset. Anything boring and borrowable goes up in price in response to bad news.

Things you want to own if the world is about to end. The best way to illustrate this is with a story: The financier Felix Rohatyn grew up in France in the 1930s. When Germany invaded, his family fled — they had enough time to pack their bags, but they lost almost everything. He recalled his parents putting gold coins in tubes of toothpaste before leaving. Everything else they owned, they left behind. If you’re living through a moment that’s going to be in the history books, the only assets you can take with you are the ones in your head or the ones you can smuggle out. (A USB drive, conveniently, fits into a variety of toiletry containers.)

One interpretation of bitcoin’s price performance during the COVID-19 crisis is that it wasn’t such a safe haven after all. But another is that it’s not the safe haven for this particular kind of crisis. The math of epidemics and immunity is such that, however bad they are, they eventually burn themselves out given a low mutation rate. Once the percentage of the population that has been infected is greater than 1 / R0, cases begin to fall even in the absence of countermeasures. With a case fatality rate of 2 percent, that’s an extraordinarily painful process to go through, and it ends up being a disaster for humanity on a historic scale.

See also: Why Bitcoin’s Safe-Haven Narrative Has Flown Out the Window

An intense disaster, but not one that lasts forever. The 1957-58 flu pandemic may have led to the sharpest postwar recession in U.S. history (at least as of Q4 2019), but the subsequent recovery was equally swift.

Right now, that’s how most investors are thinking. Whether they think COVID-19 is overblown or underblown, they still think of it as a temporary problem from which we’ll recover in short order. In fact, the very bailouts that Satoshi referenced in the Genesis block point to an argument in favor of the recovery consensus. Conventional wisdom among investors and policymakers today is the government didn’t react fast enough in 2008 to forestall a deflationary spiral. This time around, central banks are moving fast to supply cheap capital to financial institutions. In that scenario, governments and economies don’t collapse, and nobody has to flee their home hours ahead of disaster.

They do, however, need to scramble for dollars to service debts, so they’ll sell anything – stocks, bonds, real estate, crypto – and convert it into an asset they can use to pay the bills.

Bitcoin’s drop doesn’t disprove the safe haven argument. It just shows us bitcoin is designed to be a safe haven from a worse storm.