Gold, bitcoin, and portfolio diversification Lessons from the Ukrainian war

Evidence from the 2022 Ukraine war suggests that, for diversification purposes, gold and bitcoin are complements rather than substitutes during crises. Precisely, this paper shows that (i) gold is a diversifier for European stocks, oil and T-Bills, and a hedge for US stocks, while Bitcoin is a diversifier for all the assets, and (ii) since the outbreak of the war, gold is a safe haven for both stock markets, but its correlation with oil increases, while Bitcoin has the opposite pattern. Bitcoin diversifies the oil risk better than gold does. Meanwhile, the gold/ bitcoin correlation drops during the war.