Citi finds investors did better long-term owning both Bitcoin and gold, not choosing between them - Coinfea

Citi finds investors did better long-term owning both Bitcoin and gold, not choosing between them

ContentsCiti portfolio findings on mixed allocationWells Fargo’s outlook on gold and the debasement cycleBitcoin funding signals and market positioningCiti research indicated that combining a modest allocation to Bitcoin with gold improved traditional stock and bond portfolios over the past decade

The study suggested that investors did not need to treat the assets as competing hedges.

Citi portfolio findings on mixed allocation

Citi analyst Alex Saunders said a 5% gold allocation improved portfolio efficiency, while splitting that allocation between gold and Bitcoin enhanced returns further

The analysis showed that a blended approach outperformed a standard 60/40 equity and bond portfolio across multiple market conditions

The bank noted gains during bond bull scenarios and improved resilience during bear-steepening periods

It added that since 2020, fiscal concerns and persistent inflation risk premia have shaped market behaviour and are expected to continue influencing asset performance

Citi also highlighted that Bitcoin has recently outperformed gold during periods of bond market weakness and broader instability

Over the past two months, Bitcoin gained 9 percent while spot gold declined about 4%, reinforcing the case for diversification between both assets.

Wells Fargo’s outlook on gold and the debasement cycle

Wells Fargo Securities presented a wide outlook for gold, projecting a potential rise to $8,000 per ounce by 2027 in its bullish scenario

The bank also outlined a bear case that places gold near $4,000, reflecting uncertainty in macroeconomic conditions

Analysts linked the bullish view to a continued debasement trade, where investors shift toward assets seen as stores of value amid weakening confidence in fiat currencies

The bank described the current environment as the fourth debasement cycle that began in 2022

It added that gold is currently closer to a fair value estimate of $4,500 based on its internal model

The analysis also tracked the M2 to gold ratio as a key indicator of monetary expansion relative to bullion prices.

According to strategist Ohsung Kwon, most scenarios still suggest continued debasement pressures that could support higher gold prices.

Bitcoin funding signals and market positioning

On-chain data from Glassnode showed Bitcoin funding rates falling to their lowest level since 2023, even as prices climbed toward $75,000 during March and April

The seven-day average funding rate reached about negative 0.005%, indicating cautious positioning among derivatives traders

Historical patterns show similar conditions near major market turning points. Funding turned sharply negative during the March 2020 sell-off linked to the pandemic, during China’s mining restrictions in 2021, and again at the height of the FTX collapse in 2022

It also dropped during the Silicon Valley Bank crisis in 2023 and during later macro shocks, including the yen carry trade unwind in 2024 and the April 2025 Liberation Day sell-off

These episodes were followed by significant recoveries in Bitcoin prices.

Citi’s findings and related institutional commentary point to a growing acceptance of combining Bitcoin and gold within diversified portfolios

The research suggests that both assets respond differently to macroeconomic pressures, which can improve risk-adjusted returns when held together rather than separately

At the same time, broader market signals from derivatives and funding rates indicate that Bitcoin remains sensitive to liquidity cycles and investor positioning

Meanwhile, gold continues to be influenced by long-term monetary trends and fiscal expectations, with forecasts ranging widely depending on macro scenarios

The contrasting behaviour of both assets highlights the evolving role of alternative stores of value in modern portfolios

As institutional interest expands, allocation strategies are likely to focus more on balance and correlation benefits rather than choosing a single hedge

This shift reflects a broader move toward multi-asset diversification strategies that account for both digital and traditional forms of value preservation in changing economic conditions.