Bitcoin and gold gave investors a better long-term result when they sat in the same portfolio instead of fighting for the same slot, according to a Citi study on how the two assets worked inside a portfolio built around bonds and equities over the last 10 years.
That view comes as Bitcoin has started trading less like a pure hedge and more like a risk asset at times, leaving investors with a practical portfolio question. If gold still has a place and Bitcoin is not going away, how should money be split between them? Citi said investors may not need to choose one over the other at all.
Citi says a small mix of gold and Bitcoin gave portfolios better results than a standard 60/40 setup
In a Thursday note, Alex Saunders of Citi said, “A 5% allocation to gold demonstrably increases portfolio efficiency. Splitting this allocation between gold and bitcoin further enhances performance.” The bank found that gold alone already helped, then found that dividing part of that gold stake into Bitcoin improved the result even more.
Alex wrote, “This combined approach shows improvements in bond-bull scenarios relative to a traditional 60/40 portfolio and better performance in bear-steepening which post-2020, has coincided with fiscal fears and increasing inflation risk-premia which is an environment we anticipate is likely to endure.” He also said, “The relative popularity of gold investments relative to BTC also makes the mix more attractive tactically in our view.”
Citi also said Bitcoin has recently done better than gold when bond markets have been weak or unstable. The bank pointed to fiscal worries and weaker stocks during the ongoing Middle East conflict.
Over the last two months, Bitcoin rose 9% while spot gold fell 4%. Meanwhile, a separate note from Wells Fargo Securities gave gold an even more aggressive upside case. The bank said gold could climb to $8,000 an ounce by 2027, even after bullion broke down last month.
That prediction rests on what the bank called the debasement trade. In plain terms, that means central banks around the world are losing faith in fiat currencies such as the U.S. dollar and are leaning harder toward assets seen as more neutral stores of value.
Ohsung Kwon, chief equity strategist at Wells Fargo Securities, wrote, “We’re in the 4th debasement cycle that started in 2022. Following the recent pullback, gold is now closer to our model’s fair value of $4,500, and all three drivers are likely to suggest further debasement from here.”
Kwon said four out of five economic scenarios in the bank’s work still point to more debasement, which is why the bull case reaches $8,000, a more than 66% upside from current prices.
The bear case was much lower. Kwon said gold could fall to $4,000 by the end of 2027, which would be about a 17% drop from current levels.
Kwon added the current gold cycle can be tracked through the M2/gold ratio, which measures the M2 money supply against the price of one ounce of gold.
Glassnode tracks negative Bitcoin funding as price stays above $75,000
Moving on, data from Glassnode showed Bitcoin funding rates have fallen to their lowest level since 2023, even as the asset’s price climbed from the low-to-mid $60,000s to around $75,000 through March and April. On a seven-day moving average, funding rates dropped to about -0.005%.
That setup has shown up before at key points in Bitcoin history. In March 2020, funding turned sharply negative when Bitcoin fell to about $3,000 during the COVID-19 sell-off before later recovering. A similar pattern showed up in mid-2021 during China’s mining ban, when Bitcoin dropped to $30,000.
Funding hit its deepest level during the FTX collapse in November 2022, when Bitcoin bottomed near $15,000. It turned negative again during the Silicon Valley Bank crisis in 2023, when Bitcoin briefly fell below $20,000 before rebounding. The yen carry trade unwind in August 2024 and the April 2025 Liberation Day sell-off showed the same pattern too, with deeply negative funding lining up with local lows.
