Gold and bitcoin
Gold does the job of cash in a crash, with big swings instead of none, and adds no return the tests can see. Bitcoin is the only holding tested that made the portfolio's worst fall deeper at every weight.
Maybe Gold: optional, at most 5%, only in place of cash or bonds. Unlikely Bitcoin, as protection: at most 1% to 2% as a bet, and zero is fine.
- Gold's return a year over cash
- 1.75%
- 1975 to mid-2026, after storage costs
- Gold's swings a year
- 16%
- Against none for cash, which did the same job in a fall
- Bitcoin's return a year over cash
- 60%
- 2015 to mid-2026, with swings of 71% a year
- A portfolio's worst fall with 10% bitcoin
- 24.8% to 29.2%
- 2015 to 2026. The only holding tested that deepened the fall at every weight
Gold
Since 1975, the first year Americans could own it freely, gold earned 1.75% a year over cash after a 0.25% storage cost, with swings of 16% a year and a worst fall of 91% behind cash from its peak. In the worst tenth of stock months since 1975, moving 10% of stocks into gold added 0.92% back in the average such month, against 0.80% for cash-like government bills on the same months; gold rose in 56% of them. So gold does what cash does in a fall, and charges you 16% a year of swings for it.
It has a record against inflation that cash lacks: gold rose 90% through the late-1970s inflation while long government bonds lost 40%, gained 22% through 2008 and 2009, and lost 7% in the 2022 rate shock. How you pay for it decides the sign: bought by selling 10% of stocks, gold cost the portfolio 0.4% a year; added on top through a fund that borrows, it added 0.2%. Neither can be told from zero.
Its price after inflation, $4,027 an ounce in July 2026 money, is higher than in 98.5% of months since 1975 and above both the January 1980 and August 2011 peaks in the same money. I would not open a gold position at this price. If you hold some, hold at most 5%, in place of cash or bonds and never in place of stocks, in a retirement account.
Bitcoin
Between 2015 and mid-2026 bitcoin earned 60% a year over cash with swings of 71% a year and a worst fall of 76%: the best return for its risk of anything measured on this site. Adding it still made things worse, because it falls when stocks fall, and harder: about one and a half times as far in both directions, with a link to stocks that has tightened to 0.53 over the last seven years. It rose in 2 of the 12 worst stock months of the past decade.
A 10% position took a portfolio's worst fall from 24.8% to 29.2% over 2015 to 2026. No other holding tested did that at every weight. In 2022 it fell 58% while stocks fell 25%; between its October 2025 high and June 2026 it fell 53% while the S&P 500's own fall was 9%. Over the five years to August 2026 it returned 56% against 73% for the S&P 500, with about four times the swings, and 137 months of its best-ever returns cannot distinguish it from the S&P 500 at matched risk.
A fund that holds bitcoin on top of stocks by borrowing beat the same bitcoin bought by selling stocks by about 0.4% a year, and that gain is only the stock return on the money not sold. The borrowed bitcoin part was negative in 12 of the 13 worst stock months.
BlackRock's own guidance for the fund it sells is 1% to 2% with a 2% cap; Vanguard recommends none. The verdict rests on 13 bad stock months since 2015, so read "Unlikely" as "no evidence it helps", and not as proof it hurts. A stock bear market in which bitcoin does not fall harder than stocks would reopen it.
Tax, and which fund
Both are taxed badly in an ordinary brokerage account. Gold held through a fund that owns bars is a collectible: long-term gains are taxed at up to 28% plus a 3.8% surtax, against 23.8% on stocks, so gold goes in a retirement account, where the rate does not apply. A fund that borrows to hold gold on top of stocks (GDE) avoids the collectible rate but paid out income taxed like wages worth 1.53% a year. Spot bitcoin funds are trusts whose gains flow through as if you owned the coin; hold bitcoin in a taxable account, where a 75% fall at least gives a usable loss.
The gold funds hold the same bars in a vault and differ only in fee: IAUM 0.09%, GLDM 0.10%, IAU 0.25%, GLD 0.40%. The bitcoin funds hold the same coins: Grayscale's mini trust (BTC) 0.15%, BITB 0.20%, IBIT and FBTC 0.25%. Avoid crypto "income" funds that pay 27% to 73% a year in distributions out of the position itself.
Commodities and other coins
Broad commodity funds (PDBC, DBC) protect against inflation and not against a crash: they gained 144% across 1973 and 1974, but in the worst tenth of stock months since 1926 they rose in only 36% of them, because a recession that sinks stocks sinks demand for oil and copper too. Ether pays about 1.3% to 1.9% a year for staking before a fee that can exceed it, on an asset that fell 67% from its 2025 high.