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Head of Investment Strategy, Sustainability and Research, CIO EMEA
key takeaways.
Bitcoin, like global equities and gold, is an asset that is highly responsive to liquidity conditions in the market
However, in a period of risk-off market sentiment, Bitcoin decouples from gold and underperforms
Bitcoin’s high volatility means that its effects in a portfolio are very different from gold, or any other asset, as even modest allocations account for substantial portions of a portfolio’s risk
In absence of fundamental frameworks to determine Bitcoin’s fair value, technical analysis can provide some context for investors. As long as Bitcoin remains above USD 105,650, its upward trend looks intact. However, it demands scrutiny by any investor considering adding it to a portfolio. We do not include crypto-assets in either our strategic nor our tactical allocations.
Bitcoin has made headlines throughout 2025 with its impressive performance, climbing from USD 93,462 at the start of the year to a peak of USD 126,272 on 6 October. This surge has led to some comparisons with gold as an alternative to the US dollar. Yet recent concerns over a renewed trade tensions between the US and China underlined the fundamental differences in the behaviour of these two assets.
While both Bitcoin and gold tend to appreciate when the dollar weakens, Bitcoin does not behave like a haven asset when market sentiment deteriorates. The recent sharp rally in gold prices has left Bitcoin trailing, reminding investors that Bitcoin thrives in environments of abundant liquidity – provided market sentiment remains upbeat. Gold, by contrast, shines brightest during periods of uncertainty, offering portfolio diversification benefits that Bitcoin simply cannot match. Conversely, when investor sentiment improves and gold prices pull back, Bitcoin as a risk-on asset picks up, as the past week has shown.
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A Bitcoin-gold-Swiss franc triangle
A clear way to illustrate this dynamic is by comparing the performance of Bitcoin, gold, and the dollar against the Swiss franc. Year-to-date, Bitcoin has gained 20% in US dollar terms, rising from USD 93,462 to USD 113,714. However, in Swiss franc terms, the increase is only 6.6%, from CHF 84,840 to CHF 90,502 – reflecting the dollar’s depreciation against the franc (see chart 1, page 2). Gold, on the other hand, has surged 41% over the same period, from CHF 2,386 per ounce to CHF 3,286/oz. At the start of the year, one Bitcoin bought 35.6 ounces of gold; today, it buys just 26.7 ounces. Over the 2020-2025 period, Bitcoin’s price in gold averaged 22 ounces, with extreme swings – from lows of 10 ounces during the 2022 interest-rate-hiking cycle to highs of 35 ounces in 2021, 2024, and again this year.
Bitcoin and gold play fundamentally different roles as investments
Despite sharing some fundamental macroeconomic drivers, Bitcoin and gold play fundamentally different roles as investments. Their prices decouple when risk premiums rise in financial markets, but their volatility profiles are worlds apart. Gold’s annual volatility hovers around 17% in US dollar terms – similar to that of global equities – while Bitcoin’s is several times higher.
This means that even a modest 2% allocation to Bitcoin in a well-diversified, medium-risk portfolio could contribute roughly 10% to overall volatility. Any higher allocation would therefore quickly drive most of a portfolio’s volatility. Investors drawn to Bitcoin’s performance potential should calibrate their collateral risk exposure carefully.
We do not have a fundamental framework to analyse Bitcoin fair values because, unlike equities, cryptocurrencies have neither earnings nor cash flow to anchor their market value. Bitcoin’s price depends on overall supply and demand, and is
influenced by factors including market sentiment, adoption, technological developments, and the macroeconomic environment.
In this absence of the tools to determine fair value, technical analysis of charts and trends can provide a sentiment gauge, rather than a view, on where Bitcoin may head. Technically, after its pullback in the second quarter, Bitcoin has resumed its momentum higher. It has in particular held above its 200-day average of USD 105,650, which is often seen as a key support level. Despite Bitcoin’s recent consolidation, this suggests that the wider trend remains in place. To the upside, attention is on the December 2024 peak of USD 130,075. If this level were broken, it would clear a path to prices above USD 134,000, and potentially USD 140,000.
Despite Bitcoin’s recent consolidation… the wider trend remains in place
Such levels would be consistent with a gold price of between USD 4,500/oz and USD 4,600/oz and a ratio to gold of around 35 ounces per Bitcoin. If geopolitical sentiment worsens, for example if the US-China trade conflict persists instead of being resolved as broadly expected, the resulting likely cyclical downturn and deeper equity market correction would see gold continue to outperform any other asset, Bitcoin included. If Bitcoin consolidates, support levels stand at
USD 107,034. Should this level be broken to the downside, the next support stands at the 200-day average of USD 105,650, then USD 98,287.
Cryptocurrencies including Bitcoin can play a role as an investment vehicle, as proven by their rising use in transactions
and capitalisation. However, their volatility and extreme drawdowns mean that they are neither assets nor a store of value comparable to those that we hold in our strategic asset allocations.
This is a marketing communication issued by Bank Lombard Odier & Co Ltd (hereinafter “Lombard Odier”).
It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a marketing communication.
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