In a note to clients late Tuesday, Bitwise Chief Investment Officer Matt Hougan presented research from the asset manager’s Senior Investment Strategist, Juan Leon, and Quantitative Research Analyst, Mallika Kolar, showing a portfolio combining bitcoin BTC and gold significantly improved risk-adjusted returns compared to a traditional allocation.
The analysis found that a 15% combined allocation to bitcoin and gold produced a Sharpe ratio nearly three times higher than a standard 60/40 portfolio over the past decade.
The Bitwise analysts said the research stress-tests a recent recommendation by Bridgewater Associates founder Ray Dalio, an influential name in the hedge fund industry. Dalio suggested a 15% combined allocation to gold or bitcoin as a hedge against dollar debasement from federal debt and deficit spending.
Defense in drawdowns, offense in recoveries
According to the note, Bitwise used Bloomberg data to analyze four major market drawdowns: 2018, 2020, 2022, and 2025. In each, gold demonstrated a cushioning effect, while bitcoin experienced steeper declines than equities before leading recoveries in the subsequent year, except in 2025, which is yet to be determined.
During the 2018 drawdown, equities fell 19.34% while bitcoin dropped 40.29% and gold gained 5.76%. In the 2020 COVID-19 drawdown, equities dropped 33.79%, bitcoin fell 38.10%, and gold declined 3.63%. In 2022, equities fell 24.18%, bitcoin dropped 59.87%, and gold fell 8.95%. During the 2025 pullback, equities dropped 16.66%, bitcoin fell 24.39%, and gold gained 5.97%, the analysts noted.
However, the subsequent recovery phases showed bitcoin’s offensive strength. Following the 2018 downturn, bitcoin gained 78.99% in the subsequent year while gold rose 18.14%. After the 2020 drawdown, bitcoin rallied 774.94%, gold gained 111.92%, and equities rebounded 77.80%. Following the 2022 drawdown, bitcoin rose 40.16%, gold climbed 17.53%, and equities rallied 22.82%.
The study also included preliminary data for the ongoing recovery from the 2025 drawdown. As of the analysis, equities were up 38.65% from their trough, while gold had gained 44.79%. Bitcoin’s recovery trailed at 14.04%, with the full one-year post-drawdown period not concluding until April 2026, Bitwise said.
A portfolio holding both assets achieved a Sharpe ratio of 0.679, according to Bitwise’s calculations. A traditional 60/40 portfolio had a Sharpe ratio of 0.237 for the same periods. A portfolio with only gold and no bitcoin registered a ratio of 0.436.
The research team concluded the data supported a combined approach. “Often, the question of gold vs. bitcoin is framed as either/or,” Leon and Kolar wrote in the note. “As the data shows, historically the best answer is ‘both.’”
© 2026 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Trade Crypto On Coinhub Exchange
Trade Crypto On Coinhub Exchange
Stay ahead of the market by turning news insights into trading opportunities. With Coinhub Exchange, you can seamlessly buy, sell, and manage your digital assets, all in one secure platform. Take advantage of real-time market insights, deep liquidity, and fast execution for your favorite cryptocurrencies. Don’t just read about it — trade crypto now!
Disclaimer
The content of this article shown by Coinhub News, powered by The Block, is for informational purposes only and should not be construed as financial, legal, tax, or investment advice. Coinhub News and its affiliates are not a licensed financial advisor, legal advisor, broker, or tax advisor, and ... should not be considered as professional advice or a recommendation to engage in any specific investment, legal decision, or financial transaction. Cryptocurrency markets are highly speculative and volatile. Readers should perform their own independent research and consult with a qualified professional before making any financial or legal decisions. The opinions expressed in this article are those of the author and do not necessarily represent the views or opinions of the Company of its affiliates. Additionally, the Company does not make any representations or warranties regarding the accuracy, timeliness, reliability, or completeness of any information in this article. By accessing this content, you acknowledge that any reliance on the information contained in this article is solely at your own risk. The Company is not responsible for any financial losses, legal disputes, or other damages that may arise from reliance on this content or from any investment or legal decisions based on the information provided. Investing in cryptocurrencies involves substantial risks, including the risk of losing your entire investment, and you should carefully consider whether it is appropriate for your circumstances.
Read more
