Crypto Long and Short: Why Gold and Bitcoin Can Be in the Same Portfolio

Crypto long and short this week focuses on a debate that has become relevant again: should an investor choose between gold and Bitcoin, or should these assets be viewed as different tools of a single strategy to protect against currency devaluation.

Gold and Bitcoin: Not Rivals, but Different Stages of One Idea

The rise of gold to around $4,200 per ounce and Bitcoin's holding around $84,000 has once again brought to the forefront the question of what should be in a portfolio: traditional gold or its digital alternative. But such a framing is too narrow. Both assets share a key property: their supply cannot be increased by a decision of the central bank or fiscal authorities.

Gold has about 5,000 years of history as a reserve asset. Bitcoin's experience is much shorter—17 years—so there is less empirical data on it. However, in a world overloaded with debt, the very idea of limited supply is becoming increasingly significant.

In the U.S., federal debt has exceeded $39 trillion. Just servicing the already accumulated obligations costs the country about $1 trillion a year. For many developed economies, the long-term picture looks even more complicated. In such conditions, currencies often become a mechanism through which the system alleviates fiscal pressure. The U.S. dollar has lost about 40% of its purchasing power over the last two decades.

Why Gold and Bitcoin Don’t Necessarily Have to Be a Classic Hedge

When evaluating such assets, it is important to separate two different tasks. The first is to protect the portfolio during market stress, when the asset should move against stocks and bonds. The second is to preserve value relative to a currency whose purchasing power is gradually declining.

A 2025 study published in Resources Policy used multifractal cross-correlation analysis across six asset classes: developed market equities, emerging market equities, bonds, commodities, energy, and cryptocurrencies. Its conclusion was harsh: neither gold nor Bitcoin can strictly be considered a hedge or a safe haven for financial markets.

But this conclusion pertains specifically to the behavior of assets during market downturns. It does not answer another question: can gold and Bitcoin preserve value relative to money that is being devalued over time? Many investors buy them not as a buffer against short-term shocks but as a bet on currency devaluation. The logic is simple: an asset that is not a government obligation can add a different type of diversification to the portfolio.

The Advantage of Gold Lies in Infrastructure, Not Just History

Gold and Bitcoin are not on opposite sides of the investment debate but on different segments of the same trajectory. Gold already has a developed storage infrastructure, a clear legal framework, and the status of a reserve asset that central banks can work with here and now.

Bitcoin does not yet fully possess such a set of capabilities. Its lag is not so much due to the weakness of the idea itself but rather to the earlier stage of infrastructure development and a lower level of institutional penetration. At the same time, Bitcoin often resonates more with the younger generation of investors, for whom the digital form of the asset seems natural.

In the second quarter of 2026, central banks bought a record 289 metric tons of gold after 244 metric tons in the first quarter. This data is provided by an industry body funded by participants in the mining sector, but the pace of purchases is confirmed by other sources as well. For the market, this is one of the most vivid signals of where reserve managers are directing capital and why.

Bitcoin is being purchased under a similar idea, but through a different infrastructure. Spot ETFs help solve the access and storage problem for institutional investors; however, they do not provide Bitcoin with the sovereign reserve status that central banks require.

The Main Question - Not Which Asset Wins, But What Proportion to Hold

Investors do not necessarily have to choose one side. Central banks buy gold because the infrastructure for this has long existed. Institutional participants buy Bitcoin through an infrastructure that is still being formed. In both cases, the same logic applies - protection against devaluation, but at different stages of market maturity.

As more attention was paid to the "devaluation deal" in 2026, gold and Bitcoin were increasingly viewed not as competing ideas, but as parts of a single approach. Therefore, the question for 2027 is framed differently: not which asset will win, but what proportion of each should be held in a portfolio designed to mitigate the declining purchasing power of money.

The volatility of gold and Bitcoin differs significantly. Therefore, decisions that help investors more accurately size positions in both assets and use them within a more resilient portfolio structure are particularly important.

Gold and Bitcoin can sharply decrease in price and do not guarantee the preservation of purchasing power. Bitcoin remains a highly speculative asset with pronounced volatility. Diversification does not ensure profit and does not protect against losses. Investment products that provide access to these assets carry additional fees and risks.

Key News for the Institutional Crypto Market

This week's events show that institutional crypto infrastructure continues to expand: banks are gaining access to trading, custodial services are developing, and national ETFs are getting closer to launch. At the same time, regulators in Europe are increasing pressure on stablecoins that do not meet new requirements.

• ESMA has given crypto platforms three months to remove unauthorized stablecoins. Authorized platforms must block new operations and purchases of stablecoins that do not comply with MiCA, while national regulators must resolve the situation with existing client assets within three months.
• Sberbank has received approval to trade cryptocurrencies and has entered the Russian register of crypto exchanges. The bank plans to open trading for all clients on December 1. Bitcoin, Ether, and Tether are already being tested in its application.
• Ledger reported a spy chip in devices resold by CryptoBilis. A hidden implant in signing devices read recovery phrases from screens and transmitted them via mobile networks. Blockchain researchers estimate losses could reach $93.2 million across more than 300 wallets.
• Thailand allows the launch of locally registered Bitcoin and Ether ETFs. The rules come into effect on October 16 and allow local asset managers to create single-asset crypto funds, provided that at least 80% of their net assets track Bitcoin or Ether, and tokens are held by regulated custodians.
• Standard Chartered has launched institutional custody of RLUSD in Dubai. The bank serves compliant clients and plans to link these assets to LMAX so they can be used as collateral for trading without withdrawal from the bank. This depends on permissions and testing.

Chart of the Week: CHIP Recovers at the Turn to Credit Factory

The volume of active loans as of October 2 has decreased by about 22% - to around $311 million - and has remained roughly at this level since then. Meanwhile, the price of CHIP has increased by about 35% since October 1, reaching around 5.8 cents, although it still remains about 48% below the April peak.

The main catalyst has become GLX — a model of credit production, where loans are issued, then working loans are sold to institutional investors, and the freed-up capital is directed back into new loans. This mechanism can help restore the volume of active loans by reusing capital without a noticeable expansion of the balance sheet.

Against the backdrop of debt burden, declining purchasing power of currencies, and the development of crypto infrastructure, gold and Bitcoin are increasingly viewed as complementary rather than mutually exclusive assets. Their role in a portfolio depends on the horizon, acceptable risk, and the investor's willingness to work with varying degrees of volatility.