Risk-Reward Ratio of the First Cryptocurrency Converges with Gold

Top managers at investment giant Fidelity, which manages assets exceeding $4.5 trillion, believe that Bitcoin is ready to take its place alongside gold as a primary store of value. The company’s Director of Global Macro Strategy, Jurrien Timmer, presented analytical data demonstrating that Bitcoin’s risk-reward ratio (Sharpe ratio) is rapidly approaching that of the precious metal. This makes the first cryptocurrency increasingly attractive to long-term investors seeking a balance between potential profits and stability. At the same time, leading financial analysts note that Bitcoin is transforming into a “Swiss Army knife” among assets, demonstrating unique characteristics in various market conditions and attracting more institutional capital.

Bitcoin and Gold: Revolutionary Convergence of Indicators

Jurrien Timmer, whose forecasts are closely tracked on Wall Street, presented a striking observation about the relationship between Bitcoin and gold:

“I continue to be struck by the fact that the least correlated asset to Bitcoin is actually gold. For two players on the same team of ‘store of value,’ that’s unexpected. At the same time, Bitcoin’s risk-reward ratio continues to be astonishing. There simply isn’t another asset like it,” Timmer emphasized.

According to Fidelity’s data, from 2018 to May 2025, Bitcoin has nearly caught up with gold in terms of relative returns. On the chart for this period, gold has a value of $22.48, while Bitcoin stands at $15.95. This comparative analysis is particularly significant as it comes from one of the world’s largest and most conservative investment companies.

The fact that Bitcoin and gold show low correlation with each other, despite similar value storage functions, is of particular interest for building diversified investment portfolios. This property allows both assets to be used simultaneously to reduce the overall portfolio risk.

Based on this analysis, Timmer offers a specific recommendation for long-term investors: maintain a 4:1 ratio between gold and Bitcoin in investment portfolios. According to him, such an allocation provides an optimal balance between the stability of a traditional defensive asset and the potential high returns of digital gold.

“The proposed 4:1 ratio is not just an arbitrary figure, but the result of careful mathematical modeling of optimal asset allocation considering their historical volatility, returns, and correlation,” explains Alex Mashinsky, financial analyst and asset management expert. “This approach allows investors to gain substantial exposure to Bitcoin’s potential growth while maintaining gold’s protective function during periods of market instability.”

Different Paths in Early 2025: Gold Leads, but Bitcoin Maintains Potential

Despite the long-term convergence of indicators, Bitcoin and gold have demonstrated different dynamics in the short term. In Q1 2025, Bitcoin showed a relatively modest growth of 3.84%, while gold impressed investors with an increase of 30.33%.

Analysts at the macroeconomic bulletin Ecoinometrics attribute this difference to the current economic uncertainty in the United States, particularly regarding the unclear future policy of the Federal Reserve System and trade tensions:

“Between two hard assets—gold and Bitcoin—capital went to the one considered safer. And that asset was gold.”

This observation confirms gold’s traditional role as a “safe haven” during periods of economic turmoil. However, experts note that such dynamics do not contradict the long-term thesis of Bitcoin as a store of value but merely reflect the different maturity stages of these assets.

2024 was an exceptionally successful year for the first cryptocurrency. According to Ecoinometrics, Bitcoin ETFs attracted $35 billion in net investments, allowing them to acquire more than 500,000 BTC and contributing to a 120% increase in the asset’s value. However, in early 2025, the pace of investment inflow into ETFs slowed to one-third of the previous year’s figures.

“We’re observing a classic cycle of capital redistribution between various protective assets depending on the macroeconomic context,” comments Sarah Johnson, Chief Strategist at JPMorgan Asset Management. “During periods of heightened uncertainty, institutional investors traditionally increase their allocation to gold, but with improving economic indicators, we expect renewed interest in higher-yielding assets, including Bitcoin.”

“Swiss Army Knife” Among Assets: Bitcoin’s Unique Profile

The team at Bitcoin Suisse, one of the oldest and most respected European cryptocurrency companies, presented an interesting metaphor characterizing Bitcoin’s modern role in financial markets. According to Dominik Weibl, head of the company’s research division, the first cryptocurrency has turned into a kind of “Swiss Army knife” among assets:

“In the current environment, Bitcoin has become a ‘Swiss Army knife’ among assets. Whether stocks are rising or bonds are falling—the asset trades based on the fundamental balance of supply and demand, providing a unique winning profile that traditional assets don’t have.”

This characterization highlights one of Bitcoin’s main advantages—its relative independence from traditional market cycles and correlations. Unlike most financial instruments that demonstrate a high degree of interconnection during periods of market stress, Bitcoin often follows its own trajectory, determined by cryptocurrency market-specific factors.

Bitcoin Suisse analysts predict that with improving macroeconomic conditions and growing trust in ETFs, Bitcoin has every chance of reaching new historical maximums. Key factors that may contribute to this include further institutional adoption, development of regulatory clarity, and potential monetary policy easing by leading central banks.

“The Swiss Army knife metaphor accurately reflects Bitcoin’s multifunctionality in today’s investment landscape,” agrees Michael Sonnenshein, CEO of Grayscale Investments. “For some investors, it’s an inflation hedge; for others, a means of portfolio diversification; and for yet others, a way to gain exposure to the technology sector of the future. This versatility makes Bitcoin a unique asset.”

Price Forecasts: From Moderate Optimism to Bold Predictions

The question of Bitcoin’s future value remains one of the most discussed in the financial community. Various experts and analytical agencies offer a wide range of forecasts, reflecting different methodologies and degrees of optimism.

According to Cointelegraph, one of the leading information resources in the cryptocurrency industry, BTC could reach $250,000, and in an optimistic scenario, even $444,000 in 2025. More conservative forecasts suggest growth to $220,000. At the time of writing, Bitcoin is trading at $105,050, according to TradingView data.

Among the boldest predictions are opinions from recognized industry veterans. Blockstream co-founder Adam Back believes in the possibility of Bitcoin reaching $1 million in the current four-year cycle. BitMEX exchange co-founder Arthur Hayes also considers reaching this psychologically important level realistic, albeit in a longer perspective—by 2028.

A more moderate position is taken by well-known Bitcoin analyst Willy Woo. In his opinion, the asset’s growth rate will be about 8% per year in the long term (15-20 years from now), which corresponds to more traditional investment horizons and reflects the expected market maturity.

“The range of forecasts from $220,000 to $1 million reflects not only different methodologies but also a fundamental uncertainty about what share of the value storage market Bitcoin will be able to capture,” explains Raoul Pal, founder of Real Vision and former Goldman Sachs fund manager. “If Bitcoin remains a niche asset, then conservative estimates are realistic. But if it truly becomes a global reserve asset alongside gold, then a price of $1 million doesn’t seem impossible in the long term.”

Institutional Recognition: From Skepticism to Acceptance

Statements from Fidelity, a company with more than 75 years of history and assets under management exceeding $4.5 trillion, symbolize an important stage in Bitcoin’s recognition by traditional financial institutions. Just a few years ago, such statements from representatives of a company of this level would have been unthinkable.

Fidelity’s position reflects a broader trend of institutional acceptance of cryptocurrencies. In 2024, we witnessed the launch of spot Bitcoin ETFs in the United States, which attracted significant volumes of investment and created a regulated access channel to Bitcoin for traditional financial institutions.

The transformation of attitudes toward Bitcoin can also be traced in the changing rhetoric of leaders of major financial organizations. From complete denial and criticism, many have moved to recognizing Bitcoin’s potential value as a new asset class.

“Fidelity’s recommendation on asset allocation in a 4:1 ratio between gold and Bitcoin is not just another investment advice,” notes Vitaly Buravtsev, financial analyst at “VTB Capital.” “It’s a symbolic moment of legitimizing Bitcoin as a full-fledged financial instrument. When one of the world’s largest asset managers recommends that its clients, including pension funds and insurance companies, include Bitcoin in their portfolios—it changes the entire investment landscape.”

Prospects for Bitcoin as “Digital Gold”: Challenges and Opportunities

Despite optimistic forecasts, Bitcoin’s path to the status of a universally recognized store of value alongside gold is fraught with challenges. Volatility, though decreasing over the years, remains significantly higher than that of traditional protective assets. Regulatory uncertainty in different jurisdictions also creates obstacles to institutional adoption.

However, Bitcoin possesses a number of unique characteristics that make it an attractive store of value in the digital age. Programmatically limited supply (21 million coins), independence from central bank decisions, global accessibility, and the ability to self-custody without intermediaries—all these factors align with the demands of modern investors.

“Bitcoin combines the best properties of gold—limited supply and value preservation function—with the advantages of a digital asset: instant transfer, divisibility, and programmability,” explains Matthew Hougan, Chief Investment Officer at Bitwise Asset Management. “At the same time, it remains the only truly decentralized crypto asset with an impeccable network operation history spanning more than 16 years.”

For Bitcoin as an asset class, 2025 could be defining. The projected easing of monetary policy in the United States, further development of regulatory clarity, and growing institutional adoption create favorable conditions for strengthening its position in global financial markets.

“Fidelity’s recommendation to include Bitcoin in investment portfolios alongside gold is not just a loud statement,” concludes Anthony Pompliano, renowned investor and founder of Morgan Creek Digital. “It’s a sign that Bitcoin is gradually transitioning from the category of speculative assets to the category of main investment instruments, accessible even to the most conservative investors. This process won’t be linear, but the direction of movement is becoming increasingly evident.”