Bitwise Chief Investment Officer Matt Hougan shared new research arguing that pairing bitcoin with gold improved risk-adjusted returns versus a traditional 60/40 portfolio.

The findings were presented in a note to clients citing work by Senior Investment Strategist Juan Leon and Quantitative Research Analyst Mallika Kolar.

What Bitwise tested

Bitwise analyzed the past decade and found a portfolio with a 15% combined allocation to bitcoin and gold produced a Sharpe ratio of 0.679.

A standard 60/40 portfolio posted a Sharpe ratio of 0.237 over the same periods.

A gold-only portfolio (with no bitcoin) registered a Sharpe ratio of 0.436.

Drawdowns and recoveries

Using Bloomberg data, Bitwise reviewed four major drawdowns: 2018, 2020, 2022, and 2025.

In 2018, equities fell 19.34% while bitcoin dropped 40.29% and gold gained 5.76%.

In the 2020 COVID-19 drawdown, equities fell 33.79%, bitcoin dropped 38.10%, and gold fell 3.63%.

In 2022, equities fell 24.18%, bitcoin dropped 59.87%, and gold fell 8.95%.

In the 2025 pullback, equities fell 16.66%, bitcoin dropped 24.39%, and gold gained 5.97%.

Bitwise said subsequent recovery phases showed bitcoin’s strength, including gains of 78.99% after 2018 and 774.94% after 2020.

Dalio’s 15% hedge thesis

Bitwise framed the work as a stress test of Bridgewater founder Ray Dalio’s suggestion of a 15% allocation to gold or bitcoin as a hedge against dollar debasement.

That theme is often discussed alongside long-term dollar weakness measures.

Leon and Kolar wrote in the note:

“Often, the question of gold vs. bitcoin is framed as either/or. As the data shows, historically the best answer is ‘both.’”

Bitwise also included preliminary data on the ongoing recovery from the 2025 drawdown, noting equities were up 38.65% from their low, gold was up 44.79%, and bitcoin was up 14.04% at the time of analysis.