As both gold and bitcoin achieved record highs in 2024, investment experts are making the case for including both assets in 2025 portfolios, emphasizing their distinct characteristics and near-zero correlation. Gold, with its 5,000-year history, maintains a 0.03% correlation with the S&P 500 since 1971, providing proven protection against inflation and currency depreciation. Bitcoin, despite Fed Chair Powell’s comparison to gold, shows different market behavior with a 0.21 correlation to the S&P 500 since 2014. Investment professionals recommend conservative allocations: BlackRock suggests up to 2% for bitcoin, while portfolio managers like Thomas Martin advocate up to 10% for gold. The key distinction lies in their risk profiles – gold serves as a stable store of value, while bitcoin offers potential for exponential growth but with the risk of total loss. This complementary relationship, rather than competition, makes a strong case for including both assets in diversified portfolios, particularly given economic uncertainties ahead in 2025.
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