A pure equities index fund earned about 12% with a risk-adjusted ratio of 0.55. Adding bonds dropped the return to roughly 8% and left the risk metric near 0.45. Reallocating 10 bond points to gold pushed the ratio to 0.62 and lifted the return to 12%.
Meanwhile, the same substitution with Bitcoin drove the ratio past 0.80 and elevated the return to 14%. The publication only counted downside deviation, setting the risk-free rate to zero.
Kuiper said investors now confront deglobalization, persistent inflation, and policy uncertainty that undermine old allocation playbooks.
Timmer added:
“The status quo we’ve known for decades faces a transactional world order.”
Both argued that portfolios may need fresh stores of value that operate outside sovereign systems.
Kuiper traced bonds’ nominal compound annual growth to just 1% to 2% over the past decade and noted real drawdowns that reached 55%. Timmer recalled 2022 when treasuries “went from being the port in the storm to bringing the storm.”
Those outcomes prompted the pair to consider which macro assets could fill the hedging role that bonds once fulfilled. Their answer pointed to scarce digital assets, with Bitcoin foremost.
Kuiper labeled Bitcoin a network asset whose volatility often works in favor of holders. He cited internal modeling that shows price expanding 6x for every 40% rise in the network’s age.
Ecoinometrics’ comparison with gold reinforces that view. An allocation identical in size and funded from the same bond sleeve delivered a markedly lower upgrade to risk-adjusted performance despite gold’s long tenure as a hedge.
Bitcoin’s outperformance on both axes of return and downside-adjusted risk aligns with the narrative that the asset class now commands consideration alongside precious metals and inflation-protected securities when investors assemble durable multi-asset portfolios.
