Bitcoin has historically been seen as a hedge against inflation. In inflationary environments, its fixed supply makes it an attractive store of value, driving prices up as more people seek a stable asset. However, its correlation with the stock market complicates this. Recently, Bitcoin has shown increasing correlation with equities, meaning it can be affected by broader market trends. During economic downturns, investors might sell Bitcoin along with stocks, causing its price to drop. But in times of high inflation and stable markets, Bitcoin can still perform well as an alternative investment.