Gold vs BTC - Dr. Jekyll vs Mr Hyde (Patreon)

Gold performance has been nothing short of amazing the last year. It's taking everybody by surprise except for the Goldbugs who waited 15 years for this to happen. But thanks to the huge stacking by the Chinese and Russian central banks to skirt sanctions and get access to some type of hard money in a low risk way this is driven up the price big time. This is not retail stacking by no stretch of the imagination.

PER FIDELITY:

While gold is a stable, time-tested store of value, Bitcoin is both an aspirational store of value and a speculative asset, capable of delivering exceptional returns but also significant losses. Timmer suggests that owning both assets can offer portfolio diversification—gold for stability and Bitcoin for higher growth potential, balancing risk and reward. But you never know which BTC will show up... Dr Jekyll or Mr Hyde

This chart from Fidelity shows the Sharpe Ratios of gold and Bitcoin from 2014 to 2025 highlights their differing risk-return profiles. Gold’s Sharpe Ratio remains relatively stable, reflecting its status as a traditional, low-volatility store of value. In contrast, Bitcoin’s Sharpe Ratio is much more volatile, with dramatic peaks during bull markets (such as 2017 and 2021) and deep troughs during downturns (notably in 2022). By 2025, Bitcoin’s Sharpe Ratio surpasses gold’s, indicating stronger recent risk-adjusted performance, but with much greater swings over time.

The Sharpe Ratio is a key financial metric that measures an investment’s risk-adjusted return, showing how much excess return is earned for each unit of risk taken. It is calculated by subtracting the risk-free rate (such as U.S. Treasury bills) from the portfolio’s return, then dividing by the portfolio’s standard deviation (a measure of volatility). A higher Sharpe Ratio indicates better risk-adjusted performance, with values above 1 considered good, above 2 very good, and above 3 exceptional. Years ago we created our own custom Sharpe Ratio which is a key ingredient in a few of our data models.

But rest assured, BTC has still smoked GOLD over pretty much any timeframe and I believe will continue to do so. We are still so early.

h/t sanjay for the chart