Bitcoin and Gold Diversification Improves Returns, Says PlanB

Source: CryptoNewsNet Original Title: Bitcoin and Gold Diversification Improves Returns, Says PlanB Original Link: Bitcoin ($BTC) and gold have long been getting wider attention in discussions over the smarter investment option. While Bitcoin ($BTC) serves as a high-risk, high-reward crypto asset and gold often appears as a safe haven, analysts point out that their combination may offer superior returns.

According to recent data analysis, the risk/return profile of Bitcoin ($BTC) and gold is almost identical when measured by the Calmar ratio. Notably, a portfolio merging 20% Bitcoin ($BTC) with 80% gold has shown decreased risk and notably increased returns in comparison with holding just gold alone.

Market Performance Comparison

The market data discloses that both Bitcoin ($BTC) and gold have evolved across diverse market cycles. Gold steadily surged from $1,250 in 2017 to nearly $4,700 at the start of 2025, providing a geometric profit of 16% with a peak drawdown of 22%. In the meantime, Bitcoin ($BTC) spiked from $1,250 to $90,000, presenting a geometric profit of 61% but incurring substantial volatility with an 84% drawdown.

Balanced Portfolio Strategy

When merged into a single portfolio comprising 20% Bitcoin ($BTC) and 80% gold, investors experienced a balanced outcome. This resulted in nearly 30% geometric profit and just 18% drawdown, with the Calmar ratio reaching 172%. Such an excellent strategy underscores the significance of diversification for the optimization of risk-adjusted performance.

Long-Term Capital Preservation

The remarkable results of Bitcoin ($BTC) and gold’s merger in the portfolio challenge the long-held narrative of choosing one between these two assets. For investors looking for long-term capital preservation, the 20/80 Bitcoin-gold blend provides a compelling strategy. By combining innovation with stability, this model delivers a blueprint for forward-looking, resilient investment strategies.