Bitcoin and gold significantly enhance a portfolio's risk-adjusted returns compared to traditional strategies, according to analysts at Bitwise.

Over the past decade, a mixed allocation of 15% between the leading cryptocurrency and the precious metal has yielded a Sharpe ratio nearly three times higher than that of the standard 60/40 portfolio.

The Sharpe ratio is a measure that helps assess investment performance adjusted for risk, indicating the additional return an investor earns for each unit of volatility.

A high Sharpe ratio reflects effective capital management, suggesting that an asset generates profit with moderate price fluctuations. Conversely, a low ratio indicates that potential gains do not justify the level of risk.

Bitwise explained that they effectively tested and confirmed the recommendation of billionaire and Bridgewater Associates founder Ray Dalio. In July, he recommended allocating 15% of an investment portfolio to Bitcoin or gold as a hedge against the devaluation of the US dollar.

The calculated Sharpe ratio for a portfolio with 15% in these two assets was 0.679, compared to 0.237 for the classic portfolio. A strategy focused solely on gold yielded a result of 0.436.

Crisis Dynamics and Growth

In their study, analysts examined four major market downturns (2018, 2020, 2022, and 2025), revealing a clear pattern in asset behavior.

During downturns, gold acts as a stabilizer, showing gains or smaller losses. Bitcoin, on the other hand, experiences deeper corrections than stocks. In recovery phases, the leading cryptocurrency significantly outperforms gold and other traditional assets.

For instance, in 2020, amid the COVID-19 pandemic crisis, stocks fell by 33.79%, Bitcoin by 38.10%, and gold by 3.63%. However, during the overall recovery, Bitcoin surged by 774.94%, gold by 111.92%, and stocks by 77.8%.

Analysts also outlined the dynamics of the current rebound following the October crash. At the time of the study (data is preliminary), gold led the way, rising 44.79% from its local bottom. Stocks gained 38.65%, while Bitcoin increased by 14.04%.

The complete recovery cycle is expected to conclude in April 2026, so final results may vary.

“The question of choosing between gold and Bitcoin is often framed as 'either-or.' However, as the data shows, historically, the best answer is 'both,'” concluded Bitwise.

It’s worth noting that for the first time since mid-2022, the 52-week correlation between Bitcoin and gold has dropped to zero.