Invest in gold or bitcoin? That is the question

Abstract

For centuries, gold has been widely accepted as a safe haven. However, since the rise of cryptocurrencies, Bitcoin has been a controversial investment option among market players worldwide. This research presents an empirical model that compares the two assets to determine which is the more attractive investment option. Based on a multidimensional framework, the study evaluates three major literature dimensions: historical profitability, risk & risk-adjusted performance, and asset decoupling. The methodology includes average monthly and annualized compound returns; skewness and kurtosis basic diagnostic; maximum drawdown; DPMO; average loss size (ALS); Sharpe and Sortino ratios; and Spearman correlations for hedge and safe-haven properties analysis. The sample period extends from July 2010 to May 2026, considering three structural time segments: a full period (2010–2026), a maturation stage (2014–2026), and a polycrisis stage (2020–2026). Additionally, several macroeconomic variables representing global economic flows were included, such as the NASDAQ, Dow Jones, S&P 500, oil prices, and major currency pairs. The empirical findings reveal that while Bitcoin initially compensated for its risk with exorbitant returns, in today's polycrisis economy, gold has proven to be a far more efficient asset, offering more than double the risk-adjusted return in comparison with Bitcoin. Furthermore, the results completely invalidate the argument that Bitcoin has stabilized as a safe haven fund, reinforcing its property as a speculative risk-on vehicle that intensifies its coupling with stock market benchmarks during periods of stress, among other findings. Ultimately, these insights aim to shed light how economic actors make decisions, depending on individual goals, the desired risk exposure, and their preferred portfolio diversification strategy.