Gold boosts returns and lowers risk, while Bitcoin heightens volatility: World Gold Council

New Delhi, Aug 17: Gold consistently reduces portfolio volatility while improving returns, even with increased allocation. By simulating portfolio performance with varying allocations of gold (2.5 per cent to 10 per cent), it’s evident that the metal bolsters return without adding significant risk, according to World Gold Council.On the other hand, Bitcoin shows diminishing returns as allocation increases. A 2.5 per cent allocation of bitcoin can enhance risk-adjusted returns, but beyond that, the portfolio’s volatility rises, leading to larger drawdowns and lower overall performance.The data underscores that while bitcoin may offer short-term upside, it introduces risk that erodes its effectiveness as a stable store of value.Global equities experienced a sharp downturn, with the S&P 500 and NASDAQ dropping over 4 per cent and 6 per cent, respectively, at the peak of the selloff. Amid this volatility, the debate over whether bitcoin can be considered “digital gold” resurfaced, as investors re-examined its place as an inflation hedge and a store of value.