Inverse Volatility Weighting Reduces Bitcoin-Gold Blend Drawdowns

Investors using a dynamic allocation of Bitcoin and tokenized gold experienced materially smaller drawdowns than those using a 50/50 split between 2017 and 2025. This outcome is the basis for the Coinbase Store of Value Index (COINSOV), a benchmark launched by MarketVector Indexes and Coinbase Asset Management. The index employs a rules-based method that adjusts allocations between the two assets based on inverse volatility, favoring the asset with lower recent volatility. It rebalances quarterly to maintain a drawdown profile comparable to gold. "In a world of fiscal dominance, the future belongs to scarce assets that cannot be printed and are not an obligation of a government or private issuer," said Anthony Bassili, President at Coinbase Asset Management. MarketVector research indicates this model delivered stronger risk-adjusted returns than static Bitcoin-gold allocations and several widely tracked benchmarks during that period.