It was determined that portfolios using Bitcoin and gold together offer a stronger risk-return profile compared to classical asset allocations. Research shared with investors by Bitwise on Tuesday found that a hybrid approach has significantly improved performance over the past decade. While the study presented an alternative framework for investors seeking protection against the depreciation of the dollar, it also tested the proposal of Ray Dalio, one of the leading names in the hedge fund world, with numerical data. The analysis emphasizes the importance of turning to complementary instruments in portfolio construction rather than sticking to a single asset.
Why Are Bitcoin and Gold Stronger Together?
Bitwise’s research shows that a portfolio that includes 15 percent Bitcoin and gold delivers much higher risk-adjusted returns than the traditional allocation of 60 percent stocks and 40 percent bonds. According to the analysis, the mixed portfolio in question reached a Sharpe ratio of 0.679 for the same period, while the classic 60/40 portfolio remained at 0.237. The portfolio, which contained only gold but no Bitcoin, was positioned at an intermediate point with a Sharpe ratio of 0.436.
The team behind the research includes Bitwise CIO Matt Hougan, Senior Investment Strategist Juan Leon, and Mallika Kolar, who is responsible for quantitative analysis. While evaluating the data, the team used Bloomberg sources to examine four major market declines in 2018, 2020, 2022 and 2025. The findings reveal that gold acts as a buffer in periods of decline, while Bitcoin stands out in the recovery phases, even though it experienced sharper withdrawals.
Dalio’s 15 Percent Hedging Thesis
The study stress-tested Bridgewater Associates founder Ray Dalio’s proposal for a 15 percent Bitcoin or gold allocation, citing the view that rising federal debt and budget deficits could erode the dollar. It was noteworthy that while stocks decreased by 19.34 percent in 2018, gold rose by 5.76 percent, and gold played a stabilizing role with limited losses during the pandemic shock in 2020. During the same periods, Bitcoin experienced sharper declines, but made strong jumps in the following years.
The recovery phases showed why the mixed approach combines defense and attack in the same pot. Bitcoin’s rise of approximately 79 percent after 2018 and its rally exceeding 774 percent in the post-2020 period significantly strengthened the return side of portfolios. Although the recovery process for its withdrawal in 2025 has not yet been completed, Bitwise data reveals that gold and stocks are gaining rapid momentum, and Bitcoin’s performance will be monitored until April 2026. The research team points out that the data should be evaluated together rather than the “gold or Bitcoin” dilemma.
