Gold All-Time High
ByteTree BOLD Index Monthly Rebalancing Report
Following the rebalancing on 31st March 2025, the new target weights for the BOLD Index are 25.7% Bitcoin and 74.3% Gold, a 0.2% increase for Bitcoin over the previous month.
The 21Shares ByteTree BOLD ETP (BOLD) invests in Bitcoin and Gold. BOLD combines the world’s two most liquid alternative assets on a risk-adjusted basis. Due to their natural low correlation, the diversification benefits of holding both assets have been unusually high. Bitcoin prefers risk-on market conditions, while Gold prefers risk-off.
In March, BOLD rose by 6.1%, Bitcoin fell by 2.1%, and Gold rose by 9.3%, while global equities fell by 4.68% in USD terms.
The target weights last month were 25.5% and 74.5% (Bitcoin to Gold). Price changes over the month led to the last day’s weights at 23.8% Bitcoin and 76.2% Gold. This means the latest rebalancing has seen 1.9% added to Bitcoin and reduced from Gold to meet the new target weights.
Bitcoin, Gold, BOLD, and Equities in USD – March 2025
BOLD Performance
Over the past year, Bitcoin has returned +16.3%, in contrast to Gold, with a +38.7% gain, while equities have risen by +6.0%. BOLD has returned +36.1% in US dollars. Although slight, BOLD has nearly kept up with Gold and averted the correction in Bitcoin, demonstrating the benefits of a rebalancing strategy.
Bitcoin, Gold, BOLD, and Equities - Past Year
Since the 21Shares ByteTree BOLD ETP inception on 27th April 2022, Bitcoin has returned +110.8%, Gold is up +65.6%, and equities are up +29.2%. BOLD has returned +86.6%. A fixed 75/25 Gold/Bitcoin strategy would have returned 76.9%, once again demonstrating the power of rebalancing. That 9.7% outperformance comes after fees.
Bitcoin, Gold, BOLD, and Equities - Since Inception
Monthly Rebalancing of the BOLD ETP
BOLD allocates to Bitcoin and Gold on a risk-adjusted basis using past volatility, which is calculated using daily price movements. The less volatile asset, which has lower daily price moves, gets a higher weight in the index at the end of the monthly rebalancing.
Bitcoin and Gold’s Past 360-day Volatility
Rather than having the same amount of value invested in each asset, the BOLD strategy aims to hold an equal amount of “risk” in each asset and is hence “risk-weighted”. The volatility for Bitcoin and Gold over the past 360 days was observed to be 40.7% and 14.1%, respectively. Bitcoin’s 360-day volatility has fallen by 1.2% over the past month, and Gold’s has risen by 0.1%, hence the slightly large position in the Bitcoin target weight compared to last month.
If Bitcoin and Gold had the same volatility, the weights would be 50/50. Indeed, if Gold’s volatility was ever higher than Bitcoin’s, then Bitcoin would have a larger allocation. The volatility measures have resulted in new target weights of 25.7% Bitcoin and 74.3% Gold using this formula.
Asset allocation is an important feature. Over the long term, the aim is to equalise the risk in each asset. In 2017 and 2018, BOLD had relatively low exposure to Bitcoin due to its high volatility at the time, which held it in good stead in the 2018 bear market. At other times, it has generally been in the 20% to 25% range, with the remaining balance in Gold.
BOLD Rebalance Weights
The monthly rebalancing transactions, which repeatedly top up the weaker asset, have added significant value compared to buy and hold. Using the weight in Gold, you can see how the monthly rebalancing brings the asset allocation back into line. Repeatedly doing this adds value while maintaining a constant level of risk.
Bitcoin: Daily Weight
The daily weights deviate much more than the monthly target weights due to the intra-month price movements between Bitcoin and Gold. For example, if Bitcoin were to have a material fall in price, like it did in February, it would be boosted back up to the target weight during rebalancing. This ensures the strategy maintains the optimised weights on a regular basis.
If Bitcoin was particularly strong one month or Gold weak, the rebalancing process would reduce Bitcoin exposure back down to the target weight at the month's end. This process keeps the amount of risk, as defined by volatility, roughly the same in each asset. That means BOLD maintains its level of risk over time, not being overly exposed to either Bitcoin or Gold. This explains why BOLD’s volatility is so low and a key advantage over holding Bitcoin and Gold independently.
In my recent presentation at the European Gold Forum, I was asked that if Bitcoin volatility was zero in all currencies, would the weight be 100%? The only way that could be true would be if the world went onto a Bitcoin Standard and all currencies were pegged to Bitcoin. If that happened, Bitcoin exposure would indeed be 99.999%, and there would be no need to own gold in a combined strategy. Gold would become the “what if the Bitcoin Standard breaks” trade.
BOLD Volatility Is Comparable with Gold and Diversified Equities
Bitcoin and Gold Research
ByteTree Research publishes research on Bitcoin and Gold. In the latest issue of Atlas Pulse, “The Steady Gold Bull”, I looked at past Gold bull markets in the 1970s and the 2000s. Today’s bull market has been strong but remains modest compared to the past.
Past Gold Bull markets
ETF flows have been notable for Gold, remaining strong after a prolonged period of weakness since 2020.
Gold Held by ETFs
Bitcoin flows have recovered from the worst seen in February and March.
Bitcoin Held by ETFs
Combining Bitcoin and Gold flows demonstrates that they are counter-cyclical. Bitcoin saw heavy inflows around the time of the US ETF launches in January 2024. Those periods coincided with Gold outflows. Recently, Gold has been strong, with high inflows of over $10 billion, while Bitcoin outflows have slowed. The lines are starting to converge again.
Bitcoin and Gold ETF Inflows (US$)
Please visit boldETF.com, which is full of data and charts to help investors better understand the benefits of the strategy.
BOLD ETP
The 21Shares ByteTree BOLD ETP (BOLD) has continued to grow. The fund now holds $22.8 million of Bitcoin and Gold held in safe custody, with Copper for Bitcoin and JP Morgan for Gold. It trades actively in CHF, EUR, USD, and GBP in Switzerland, Germany, the Netherlands and France. The ticker is BOLD.
21Shares ByteTree BOLD ETP Price and Volume by Share Class in US$
For information on investing in BOLD, contact bold@bytetree.com.
If your investment firm or media outlet would like a private briefing on BOLD, we will be happy to oblige. If a physical meeting is not possible, we can arrange a Zoom call.
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