- Sharpe Ratio Gains: Bitcoin’s Sharpe ratio is catching up to gold’s, suggesting similar risk-adjusted returns, with Fidelity’s Jurrien Timmer recommending a 4:1 gold-to-BTC ratio.
- ETF Flows Shift: Q1 2025 saw Bitcoin ETF inflows drop to a third of 2024’s $35 billion, while gold ETFs gained due to economic uncertainty and Fed policy shifts.
- Bullish Projections: Bitcoin Suisse forecasts BTC reaching $110K to $220K in 2025, with a high-end target of $444K if it aligns with gold’s market dynamics.
Bitcoin (BTC) is holding strong above $100,000, prompting Fidelity’s Jurrien Timmer to suggest it might reclaim its status as a top store-of-value asset. Timmer’s latest analysis highlights a convergence in the Sharpe ratios of Bitcoin and gold, implying that their risk-adjusted returns are becoming increasingly comparable.
Bitcoin vs Gold: Sharpe Ratio Comparison
Timmer points to Bitcoin’s Sharpe ratio rising to $15.95 against gold’s $22.48, closing the gap in relative performance. He recommends a 4:1 gold-to-Bitcoin ratio for a balanced SoV hedge. “It’s fascinating that gold remains the most negatively correlated asset to Bitcoin despite both being store-of-value plays,” Timmer noted.
ETF Flows and Market Dynamics
While Bitcoin held firm above $100K, Q1 2025 wasn’t all smooth sailing. According to Ecoinometrics, Bitcoin ETFs saw a sharp decline in inflows — just a third of 2024’s $35 billion — while gold ETFs gained traction. Analysts attribute this shift to US economic uncertainty and Federal Reserve policy changes, prompting investors to favor gold as a safe haven.
Bitcoin’s Path to New Highs
Bitcoin Suisse projects a strong outlook for BTC, citing its rising Sharpe ratio as a key driver for potential all-time highs above $110K. With 88% of its supply in profit, Bitcoin is positioned as a “Swiss army knife asset,” thriving regardless of broader market trends. Analysts suggest BTC could hit $220K to $444K by 2025, depending on how its network value interacts with gold’s market dynamics.
