While Bitcoin scarcity is viewed by many as an advantage over more conventional assets, a recent Bloomberg article points out that as the value of the asset class rises, it becomes more difficult to generate price spikes.

While the pseudonymous founder of Bitcoin (Satoshi Nakamoto) says the finite supply of Bitcoin—originally set at 21 million—should render it “completely inflation free,” the article notes that as its price climbs (the value of all coins currently in circulation hovers above $600 billion), “there’s a different scarcity problem looming larger.”

When the value of all Bitcoin was in the tens or hundreds of millions, the article explains, “a miniscule shift of money away from the $217 trillion world equity and bond markets into digital currency would be sufficient to make its price go wild.” But at the current value, much less dramatic price shifts will occur.

“The problem for digital bulls,” the article notes, “is that the success of cryptocurrencies tends to eat itself. As the value of the asset class rises, the shifts away from more conventional investments needed to provoke price spikes get larger and larger.”

So, why would an investor divert a portion of stock and bond holdings to digital currency rather than into more conventional assets? The best argument, the article notes, is that it can “balance out the swings in your broader portfolio.” But the article contends “there’s still little sign of that happening,” adding, “these days, it looks not so much like a hedge against the gyrations of the equity market as a leveraged bet on the same movements.”

The article concludes, “Crypto will only grow up if and when it finds a different driving force to the animal spirits that govern equity markets. If it really wants to be an alternative asset to stocks and bonds, it needs to start behaving like one.”