Can Bitcoin Replace Gold in an Investment Portfolio in the Polish Capital Market?
Purpose: The aim of the article is to conduct an empirical assessment of whether Bitcoin can serve as a substitute for gold as a safe-haven asset and as a risk-diversification instrument in an investment portfolio on the Polish capital market. The analysis focuses on comparing the properties of both assets under conditions of heightened macroeconomic and geopolitical uncertainty, as well as their impact on the performance of portfolios based on the WIG20 index. Design/Methodology/Approach: The study is based on weekly data for the period 2018–2025, covering phases of economic stability, the COVID-19 pandemic, the war in Ukraine, the conflict in the Gaza Strip, and the subsequent stabilization period. Rates of return, risk measures, and correlations of gold and Bitcoin with selected stock and commodity indices were compared. Diversification potential was evaluated using the classical Markowitz portfolio model, analyzing returns and risk of minimum-variance portfolios and examining portfolio efficiency via the Sharpe ratio. Findings: The results indicate that Bitcoin generated higher returns than gold during periods of relative stability; however, during episodes of pronounced geopolitical turbulence it exhibited substantially higher volatility and deeper price declines. Consequently, it did not display the characteristics of a safe-haven asset. Gold, by contrast, showed low correlation with the equity market and demonstrated the ability to mitigate losses under heightened risk aversion. In portfolios based on the WIG20 index, the inclusion of gold consistently reduced total risk and frequently improved the risk–return profile. Bitcoin enhanced return potential only at the cost of significantly increased volatility, while its diversification function weakened or disappeared in periods of elevated geopolitical tension. Practical Implications: For investors operating in the Polish capital market, gold remains an asset with confirmed safe-haven properties and an effective tool for reducing portfolio risk in times of economic and political turmoil. Bitcoin may be useful only for investors who accept high volatility and pursue return maximization; however, it does not constitute an adequate substitute for gold from the perspective of capital protection. Originality/Value: The article provides added value by conducting a comparative analysis of gold and Bitcoin in the context of the Polish capital market, which differs from developed markets in terms of structure, liquidity and institutional maturity. Accounting for distinct phases of the geopolitical cycle enables a more precise assessment of the stability and protective properties of the analyzed assets under heightened uncertainty. The findings offer insights of significant relevance for investors and researchers examining the role of alternative assets in portfolios on emerging markets. This analysis expands the existing literature on alternative investment instruments and constitutes a meaningful contribution to the discussion on the role of gold and Bitcoin in modern investment strategies.