Beyond Competition: Gold and Bitcoin as Complementary Assets

25.01.07

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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