Bitcoin Shows 44% Volatility, Low Gold Correlation
A 21shares analysis compares Bitcoin's volatility and correlations with traditional assets and suggests a small digital-asset allocation can improve portfolio risk-adjusted returns.
Updated on Nov. 6, 2026 in Investing
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Bitcoin's annualized volatility was 44% over the 12 months through September 30, 2026, according to a portfolio analysis published by 21shares. The same analysis found a 2% to 5% digital-asset allocation improved risk-adjusted returns in a traditional 60/40 stock-and-bond portfolio.
Why it matters
The findings give investors a quantified view of how a volatile asset might fit alongside stocks and bonds, a question that matters for retirement and long-term savings allocations. The analysis frames Bitcoin as an alternative asset rather than a substitute for core holdings.
The figures come from a single 21shares analysis covering the 12 months through September 30, 2026, and a three-year backtest from October 2023 through September 2026. The analysis does not address how the correlations or volatility readings might shift in different market conditions.
The players
21shares
21shares is a digital-asset investment firm that issues exchange-traded products and publishes research on crypto assets.
The details
21shares compared Bitcoin's volatility with those of Tesla and Palantir and reported Bitcoin's correlations with gold, U.S. stocks and real estate. The analysis characterized Bitcoin as an alternative-asset allocation, Ether as a technology-growth asset and Solana as a higher-risk growth allocation.
Timeline
October 2023 through September 2026: three-year period covered by the backtest and correlation figures.
September 30, 2026: end date of the 12-month volatility measurement period.
Market Dynamics
The analysis tests a small digital-asset sleeve against the long-standing 60/40 stock-and-bond benchmark used by many institutional and individual portfolios. Its findings bear on the wider debate over whether alternative assets belong in core allocations.
Investors weighing a crypto allocation can compare the 2% to 5% range against their own 60/40 or similar mix, using the volatility and correlation figures as inputs. The analysis does not indicate how a reader's own tax situation, time horizon or risk tolerance would change the result.
The takeaway
Bitcoin's low correlation with gold and real estate, alongside its high volatility, is the core tradeoff the analysis highlights. Investors should size any digital-asset position to a level they can hold through large drawdowns.
Further reading
For broader context on portfolio construction and asset allocation, see Investing.
Source note: This article includes information reported by TokenPost.
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