A new report from Bitwise suggests that holding both gold and Bitcoin can enhance portfolio performance during different market cycles. The analysis, conducted by Bitwise Senior Investment Strategist Juan Leon and Quantitative Research Analyst Mallika Kolar, indicates that gold provides a defensive cushion during market downturns, while Bitcoin tends to outperform during recoveries. The report was inspired by comments from Ray Dalio, who recommended a combined 15% allocation to gold and Bitcoin amid concerns over U.S. federal debt and currency debasement. Bitwise's analysis of market downturns over the past decade showed that gold consistently acted as a defensive asset, while Bitcoin delivered significant gains during recoveries. For instance, during the 2018 equity drawdown, gold gained 5.76% while Bitcoin fell over 40%. In contrast, Bitcoin surged nearly 79% after the 2018 market bottom. Overall, portfolios including both gold and Bitcoin demonstrated a superior balance of risk and return, achieving a Sharpe ratio of 0.679, significantly higher than traditional portfolios. This suggests that a combined allocation could offer investors better protection and growth potential in volatile markets.