Bitwise: Adding 2.5% Bitcoin to a 60/40 Portfolio Improved Returns in 100% of Three-Year Periods

New Bitwise Asset Management study using Bloomberg data from January 2014 through December 2025 finds that a 2.5% Bitcoin allocation with quarterly rebalancing improved cumulative returns in 100% of three-year holding periods and 93.81% of two-year periods, with zero three-year loss instances recorded.

The Table

Table 3 from the Bitwise study shows the contribution of a 2.5% Bitcoin allocation to a traditional 60/40 portfolio across one-year, two-year, and three-year holding periods, measuring both change in cumulative returns and change in Sharpe ratio.

One-year periods: 75.58% win rate on cumulative returns, 24.42% loss rate. Maximum improvement 16.68 percentage points, median 2.17 pp, minimum negative 2.96 pp. Sharpe ratio improved in 79.57% of one-year periods.

Two-year periods: 93.81% win rate, 6.19% loss rate. Maximum improvement 20.24 pp, median 4.92 pp, minimum negative 1.26 pp. Sharpe ratio improved in 97.95% of two-year periods, with the minimum Sharpe change at negative 0.05, essentially flat.

Three-year periods: 100% win rate, 0% loss rate. Maximum improvement 22.46 pp, median 8.58 pp, minimum 1.36 pp. The minimum is positive. Every three-year period in the dataset where a 60/40 portfolio held 2.5% Bitcoin with quarterly rebalancing produced better cumulative returns than the portfolio without it. Sharpe ratio improved in 100% of three-year periods as well, with a minimum change of positive 0.05.

What the Data Covers

The dataset runs from January 1, 2014 through December 31, 2025. That is twelve years of Bitcoin history including the 2014 to 2015 bear market, the 2017 to 2018 crash from $20,000, the 2020 COVID collapse, the 2021 bull cycle, the 2022 collapse from $69,000 to $16,000, the 2023 to 2024 recovery, the 2024 to 2025 bull run to $126,000, and the current correction back to $67,000.

Every major crash. Every bear market. Every period of maximum Bitcoin pain. All included. The 100% three-year win rate holds across all of it.

The quarterly rebalancing assumption is the methodological detail that matters most. Without rebalancing, a 2.5% initial allocation that appreciated significantly during bull markets would become a much larger portfolio weight, changing the risk profile entirely. Quarterly rebalancing keeps the Bitcoin allocation at approximately 2.5% by trimming during appreciation and adding during drawdowns. That systematic buy-low-sell-high mechanism is part of why the risk-adjusted returns improve at two and three-year horizons.

The Sharpe Ratio Numbers

The Sharpe ratio measures return per unit of risk. An allocation that improves both cumulative returns and Sharpe ratio is genuinely additive, not just return-chasing. It is producing better returns without proportionally increasing portfolio volatility.

At the one-year horizon, Sharpe improved in 79.57% of periods. At two years, 97.95%. At three years, 100%. The pattern is clear: the longer the holding period, the more reliably Bitcoin improves the risk-adjusted profile of the portfolio, not just the raw returns.

The two-year minimum Sharpe change of negative 0.05 is essentially zero. There was no two-year period in the twelve-year dataset where adding Bitcoin to a 60/40 portfolio materially damaged the risk-adjusted return profile. The worst case at two years was a trivial negative.

Bitwise Data Shows Bitcoin Investors Who Held Three or More Years Have Only a 0.7% Chance of a Loss

The Context for Financial Advisors

This data is relevant to the conversation Bitwise is having with registered investment advisors, covered in the HODLing report earlier this week. The three-year 100% win rate on both cumulative returns and Sharpe ratio is the kind of historical evidence that changes how fiduciary advisors approach the Bitcoin allocation question.

A fiduciary who does not allocate any Bitcoin to a client portfolio is implicitly making the claim that Bitcoin will perform worse than its twelve-year historical pattern. That is a defensible position during individual bear markets. Over a three-year horizon it has been indefensible 100% of the time in the available data.

Current Bitcoin price near $67,000 is below the average entry price of recent institutional buyers. For investors who are three-year oriented, the historical evidence suggests that point matters less than the holding period.

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