The traditional 60/40 portfolio is facing renewed scrutiny as two major forces reshape asset allocation: the growing dominance of artificial intelligence in equity markets and the deteriorating real-return profile of US government bonds.

A growing number of asset managers argue that investors with substantial exposure to AI stocks should consider replacing part or all of their bond allocation with Bitcoin. Their reasoning is that bonds may no longer be fulfilling their traditional role, while Bitcoin could provide an alternative source of diversification and inflation protection. The argument was outlined by CryptoBriefing in its original report.

The challenges facing bonds

US federal debt has surpassed $40 trillion. At the same time, long-term US Treasuries have produced negative real returns over the past decade, representing one of the weakest periods in 223 years of available data. After adjusting for inflation, investors who held the bonds traditionally viewed as safe assets lost purchasing power during that period.

Anthony Pompliano has argued that combining Bitcoin with AI equities addresses both sides of the portfolio equation: AI provides growth exposure, while Bitcoin may offer protection against inflation.

The case for Bitcoin as a bond alternative

Bitwise CIO Matt Hougan has offered one of the more specific allocation proposals, suggesting that investors consider a Bitcoin allocation of between 2% and 10%. He has argued that a 0% Bitcoin allocation now represents a misallocation rather than a conservative position.

A 2026 report from River Financial found that a portfolio with a 10% Bitcoin allocation achieved twice the ending value of a standard 60/40 portfolio over the previous decade. BlackRock has also highlighted Bitcoin’s low correlation with traditional asset classes, presenting the cryptocurrency as a potential diversifier at a time when stocks and bonds have increasingly moved in the same direction.

Bitcoin’s fixed supply of 21 million coins contrasts with the effectively unlimited supply of government debt. Because governments can continue issuing bonds to finance spending, the argument goes, repeated issuance may weaken the appeal of those bonds as long-term stores of value.

AI concentration raises the stakes

The AI trade has become one of the most crowded areas in market history. Mega-cap technology companies building AI infrastructure account for an outsized portion of major indexes, giving passive investors significant exposure to the sector even when they have not chosen it directly.

If AI spending slows, regulatory pressures increase, or the sector pauses after years of exceptional gains, portfolios that combine heavy AI equity exposure with underperforming bonds could face pressure from both allocations. That makes the balance among AI equities, bonds, and Bitcoin an allocation question rather than a simple choice between growth and safety.

Institutional adoption and the remaining risk

BlackRock’s research on Bitcoin’s correlation characteristics, alongside recommendations from major asset managers for non-zero allocations, suggests that the institutional discussion has moved from whether Bitcoin should be considered to how much should be allocated. The relevant signals for investors will include whether institutional proposals translate into actual portfolio allocations, whether bond real returns improve, and how Bitcoin behaves alongside AI-heavy equities.

However, Bitcoin’s historical volatility remains a significant limitation. It may be a poor substitute for bonds in portfolios that require stability. A 30% decline in an allocation designated as “safe” would be a materially different experience from a prolonged period of negative real returns.