Bitcoin fans increasingly call the token "digital gold," but many major investors remain highly skeptical about it as a hedge or way to diversify.
The price of the bitcoin rose to an intraday high of $69,000 Wednesday, reflecting a 4.6% gain following the release of CPI data.
PayPal founder Peter Thiel told a conference that bitcoin's record-high price was a sign of investors' fears about rampant inflation.
Wood said citizens in emerging markets with "significant inflation" will migrate to bitcoin and other instruments to preserve their purchasing power.
"Bitcoin isn't behaving like an inflation hedge anymore and will continue to remain heavy over expectations over higher yields," an analyst said.
Bitcoin fans have argued it's a hedge against inflation. But investors much preferred gold when price rises picked up in May.
Gold prices rose to a three-month high Monday morning as investors flocked to the asset amid the Fed's stimulative monetary policies.
If bitcoin is supposed to be an inflation hedge, why did it tank on a day when inflation spiked more than expected?
Bank of America commodity strategists say there's "no good reason to own bitcoin unless you see prices going up."