What's Your Gold and Crypto Allocations?

Every six months, Callum Thomas runs a Twitter survey asking a simple question: Are you allocating to gold or bitcoin/crypto?

The latest results (See Figure 1) tell an interesting story. Both gold and crypto allocations have climbed, but crypto has surged to a record high. Hardly surprising — prices have been on a tear, and both assets are riding the wave of investor interest as hedges against fiat currency devaluation.

Figure 1 Gold and/or bitcoin/crypto allocations by individual investors.

Professional fund managers, however, seem to be playing a different game. According to the latest BofA Fund Manager Survey, nearly 40% hold zero gold, and a whopping 75% won’t touch crypto. Even among those with gold exposure, the average allocation is a meager 2%. (See Figures 2 and 3.)

Figure 2 Crypto allocations by fund managers.

Figure 3 Gold allocations by fund managers.

The gap between retail sentiment and institutional positioning is stark — and it begs the question: Who’s got it right?

As for us, the Lumos Alpha Flagship Portfolio has no direct allocation to gold or crypto. But we did make a calculated move into a gold miner, putting about 4% of our capital to work. That single position? It’s up 29% in just one month — proof that sometimes, you don’t need to own the commodity to strike gold.

Why did we choose gold miners over gold itself? The reason is simple: gold doesn’t produce cash flow — but gold miners do. Our view is that gold will likely remain above $3,000/ounce for an extended period, though with limited room for further upside. However, at prices above this level, gold miners can generate substantial free cash flow, creating the potential for outsized returns compared to holding the metal directly.