Fidelity’s Director of Global Macro, Jurrien Timmer, is making waves in the investment world by recommending a portfolio allocation of four parts gold to one part Bitcoin as an optimal way to balance risk and reward for store-of-value investors. As Bitcoin surged above $100,000 this week and its risk-adjusted performance began converging with that of gold, Timmer’s strategy offers investors a new blueprint for navigating turbulent markets.
This article explains the reasoning behind Timmer’s allocation rule, examines recent market performance for both assets, and highlights key risks and tactical considerations for investors looking to blend traditional and digital stores of value.
Bitcoin’s Rally Spurs New Allocation Framework
As of May 16, 2025, Bitcoin traded near $103,600 while gold hit $3,213 per ounce. Notably, both assets’ 52-week Sharpe ratios—a measure of risk-adjusted returns—have drawn closer: gold at 1.33 and Bitcoin at –0.40. While gold has delivered 67 record closes since early 2024 and is up 33% year-to-date, Bitcoin has climbed roughly 25% from its April low of $76,000. This convergence in risk and return profiles prompted Timmer’s fresh look at portfolio construction.
Why 4:1? The Volatility Match
According to Timmer, scaling gold exposure to four times that of Bitcoin closely aligns the two assets’ historical volatility and cumulative returns. This means that a portfolio with 80% gold and 20% Bitcoin can achieve a risk level similar to holding just gold, while still capturing some of Bitcoin’s upside potential. This approach reframes gold and Bitcoin as complementary, rather than rival, stores of value.
“At a 4:1 ratio, gold’s volatility has been roughly equal to Bitcoin, as has its relative performance.”
— Jurrien Timmer, Fidelity (X post, May 16, 2025)
- Gold price: $3,213 per ounce (May 16, 2025).
- Bitcoin price: $103,600 (May 16, 2025).
- Sharpe ratio (52 weeks): Gold 1.33, Bitcoin –0.40.
- Recommended allocation: 4 parts gold, 1 part Bitcoin.
Portfolio Benefits and Tactical Opportunities
Blending gold and Bitcoin can temper the volatility typical of crypto investing, while retaining a strong long-term return profile. Timmer’s model suggests:
- The “sleeve” of gold buffers against Bitcoin’s sharper drawdowns.
- The combination offers exposure to both inflation protection and digital asset growth.
- Investors can tactically rebalance: as Bitcoin’s Sharpe ratio improves and gold’s trend softens, a larger allocation to crypto may be justified.
This balanced approach may appeal to institutional and individual investors seeking store-of-value alternatives to fiat currencies and bonds, particularly in a high-inflation, uncertain macro environment.
Risks Remain: Why Not All-in on Crypto
Despite the promise of this blended allocation, Timmer cautions that Bitcoin’s Sharpe ratio remains negative and its volatility is still high. Regulatory uncertainty, liquidity shocks, or adverse macro events could widen the performance gap once again, especially if crypto markets turn sharply lower or face new crackdowns.
Summary Table: Gold and Bitcoin Store-of-Value Comparison
| Metric | Gold | Bitcoin |
|---|---|---|
| Price (May 2025) | $3,213/oz | $103,600 |
| 2024–2025 YTD Gain | +33% | +25% (since April low) |
| Sharpe Ratio (52w) | 1.33 | –0.40 |
| Recommended Allocation | 80% | 20% |
Key Takeaway: A Modern Store-of-Value Playbook
Jurrien Timmer’s 4:1 gold-to-Bitcoin heuristic marks a new phase in portfolio strategy for store-of-value seekers. By pairing the stability of gold with the growth potential of Bitcoin, investors may find a more balanced way to hedge inflation, participate in crypto gains, and manage risk in an uncertain financial world. As Sharpe ratios and market trends evolve, this allocation model offers a flexible foundation for ongoing portfolio rebalancing.
