Stacking Currencies Outside the System

A U.S. portfolio is a bigger bet on the dollar than it looks, and gold and Bitcoin are two of the few holdings that sit outside the system that issues it. The Return Stacked® U.S. Stocks & Gold/Bitcoin ETF (RSSX) adds both on top of core U.S. stocks through return stacking, so an investor can diversify that currency concentration without selling the equity that drives long-term growth. For each $1.00 invested, RSSX seeks to provide a full $1.00 of core U.S. equity and $1.00 of a gold and Bitcoin strategy, sized by risk rather than dollars so neither asset dominates.

Key topics: gold, Bitcoin, non-sovereign currency, fiat, currency exposure, dollar concentration, home-country bias, return stacking, capital efficiency, the funding problem, RSSX

A Hidden Bet on the Dollar

Most investors can say how their portfolio splits between stocks and bonds. Few can name their currency mix. For a U.S. investor, nearly everything is priced, earned, and spent in dollars, making the dollar one of the largest and least examined exposures a portfolio holds.

Home bias makes it larger still. Foreign holdings would diversify currency as well as business risk, but U.S. investors hold far less abroad than global benchmarks suggest, leaving them overweight the dollar and light on foreign currencies.

For a U.S. investor, nearly everything is priced, earned, and spent in dollars, making the dollar one of the portfolio's largest and least examined exposures.

The concentration is easy to miss because it never appears as a line item. It surfaces only in relative performance, when the dollar weakens, international stocks and their currencies rise together, and a home-biased portfolio falls behind.

Addressing that concentration means holding something that sits outside the dollar system, without sending money abroad. Gold and Bitcoin are two of the few holdings that do, and RSSX pairs them, letting an investor diversify away from the dollar while U.S. stocks stay in place.

Gold and Bitcoin as Non-Sovereign Currencies

Gold's tendency to move opposite the dollar comes from where it sits, outside the system that issues it and beyond the reach of any government or central bank. Bitcoin's link to the dollar runs the same direction but far looser, so its claim rests on that shared independence rather than on any price relationship. Both are non-sovereign currencies, money no government issues and no central bank can expand.

That can sound like an inflation hedge, but the claim is narrower. It may provide no protection when prices rise for reasons unrelated to money, like an oil or food shock. What it guards against is debasement, the value a currency loses when its supply expands or its credibility erodes.

Gold and Bitcoin are non-sovereign currencies. No government issues them, and no central bank can expand them.

For most of history, gold was money. When the dollar stopped converting into gold in 1971, gold became a currency in its own right, its holders now bearing the inflation and policy risks governments once absorbed. They have been paid to bear them, with an annualized excess return of about 1.5%, the return a gold futures position earns above the cash yield on its collateral. It is compensation for gold's volatility, not a steady yearly gain.¹Annualized return of a continuous gold futures contract, 1975 to 2026. Source: Bloomberg. Calculations by Return Stacked® Portfolio Solutions. Gross of fees and transaction costs. Past performance is not indicative of future results.

The premium has also tended to come when the dollar weakens, with gold rising roughly 0.9% on average for each 1% monthly drop in the dollar (Figure 1, left panel).

Over the long run, gold has appreciated against fiat broadly, and central banks have underlined the point, adding to reserves year after year to diversify away from any single government's money.

Bitcoin shares the property but reaches it differently. Gold's supply grows slowly, by 1.5% to 2% a year as it is mined²Growth of above-ground gold stocks through newly mined metal, estimated at roughly 1.8% per year against a year-end 2025 stock of about 219,891 tonnes. Source: World Gold Council, “Gold Market Primer: Market Size and Structure.”. Bitcoin's is capped at 21 million coins, a scarcity that is absolute rather than merely slow. Gold is a physical bearer asset that must be stored and secured, while Bitcoin is digital. Their cases even rest on different ground, gold's on millennia as money, Bitcoin's on its protocol and the network enforcing it.

The two are complements precisely because they differ. Bitcoin reaches through code the independence gold reaches through history, which lets it diversify gold rather than repeat it.

Bitcoin's absolute cap is also its strongest defense against debasement. Because no one can issue more of it, its value cannot be eroded that way, which is where Bitcoin goes a step beyond gold. New coins follow a fixed, decelerating schedule, and roughly 20 of the 21 million that will ever exist have already been mined (Figure 3).

Bitcoin is the younger of the two, and its case rests on its fixed design rather than a long track record. It is far more volatile than gold, near 71% against 15%, and in stressed markets it has at times traded more like a risk asset than like money. Its volatility is why RSSX sizes the two by risk, not by dollars.

Their value is that they behave differently from stocks and bonds. The catch is that owning either one has to be funded from somewhere.

Why Diversifying Strategies Are So Hard to Add

Gold and Bitcoin are not unusual in being hard to own. Any truly diversifying strategy or asset that behaves differently from stocks and bonds hits the same two obstacles, one structural and one behavioral.

The funding problem. A portfolio is already fully invested, so a new position must be funded by selling something already at work. The traditional approach shrinks the core growth engine to make room, and that tradeoff, more than any doubt about the diversifier, is why the position so often never gets made. Return stacking is built to remove it.

Funding a new position by selling the core, more than any doubt about the diversifier, is why it so often never gets made.

The behavioral problem. Even investors who make room struggle to keep the position. Gold's returns are sporadic. It can lie dormant for the better part of a decade, then deliver much of its long-run return in a few bursts. After peaking in 1980, it fell roughly 62% and took more than a quarter-century to recover. Figure 4 shows how deep and how long those dry spells can run.

Bitcoin is harder still, with drawdowns of more than 75% recurring across its short history. Sized like an ordinary holding, a decline that steep is almost impossible to sit through, and the investor who sells to end the pain usually does so near the bottom. Funded the traditional way, by selling stocks and bonds to make room, a position that swings this hard is especially difficult to hold.

Caught between the two, most investors hold little or none of either, leaving the portfolio exposed to the very currency risk we started with.

Sizing by Volatility

RSSX adds this exposure through return stacking, layering a single gold and Bitcoin overlay on top of core U.S. stocks. Gold and Bitcoin differ sharply in volatility, with gold far steadier than Bitcoin. That makes the question not just how much of each, but by what measure. Split the overlay evenly by dollars and Bitcoin would still dominate. Its volatility is so much higher that it would carry most of the risk, and the position would move almost in step with Bitcoin alone.

Instead, RSSX sizes the two as a function of their volatility. The more an asset swings, the less of it the overlay holds, so the steadier asset, historically gold, carries the larger weight and each contributes roughly equal risk. Those volatilities shift, so the weights do too.

The goal is to balance risk, so the steadier asset carries the larger dollar weight.

Risk weighting is also what makes the pairing holdable. Scaled to what the portfolio can absorb, Bitcoin's diversifying potential is there without its volatility dominating the result.

Putting It to Work

RSSX delivers this as a stack layered on top of the core, so the core stays in place. It holds capital-efficient instruments, mainly futures posted at a fraction of their notional value, so each $1.00 invested can support $1.00 of U.S. stocks and $1.00 of the gold and Bitcoin strategy.

Consider an advisor who wants to add a 5% sleeve of bearer assets like gold and Bitcoin, seeking to hedge dollar risk. Traditionally, that 5% has to come from somewhere, by trimming the growth engine, the stability engine, or both, diluting a 60/40 to roughly 57/38/5. Funding it with RSSX instead adds the 5% on top of the existing portfolio, a full 60/40 plus 5%, or 105% total exposure. The position that seeks to hedge the dollar goes on, and the growth assets stay intact.

The investor did not trade growth for currency diversification. They added a non-sovereign currency on top of growth.

The stack eases both behavioral and the funding problems in one go. With full equity exposure intact, the investor gives up no stock upside to hold the diversifier. That matters most in a rising market, when investors who funded a diversifier by selling stocks tend to regret the trade and abandon it.

Diversification for What You Can't Predict

None of this rests on a forecast. We are not predicting the dollar's decline, and the concentration described here may never cost much. The risk is rarely the dramatic kind. A currency can lose value suddenly, in a monetary or sovereign crisis, but more often it erodes slowly over decades, the easier path to ignore.

There is also a third pattern between the two, neither a sudden break nor a slow erosion. The dollar tends to move in long cycles, multi-year stretches of strength and weakness that can arrive and pass well within a single investor's horizon. Measured against other major currencies, it has climbed and handed those gains back repeatedly over the past half century. Figure 6 traces those swings.

Holding a non-sovereign currency does not require predicting the dollar's decline, only recognizing that most portfolios hold nothing for it.

A non-sovereign currency is built for all of them. The case for holding it does not depend on knowing which arrives, or whether any does, only on the fact that most portfolios hold nothing for it. RSSX is a way to hold that exposure while keeping the core equity that carries the portfolio if the dollar holds up.

Key Takeaways

• 1A U.S. portfolio is a bigger dollar bet than it looks. Nearly everything in it is priced in dollars, and a home-market bias leaves it holding fewer foreign assets, and fewer foreign currencies, than a global benchmark would. That makes the dollar one of the portfolio's largest and least examined exposures.
• 2Gold and Bitcoin are complementary non-sovereign currencies. Gold has tended to rise as the dollar weakens, so it can offset some of that dollar concentration without sending money abroad. Bitcoin earns its place differently, through an absolute supply cap and a digital bearer form, which let it diversify gold rather than duplicate it. By sizing the two by volatility, RSSX gives each a roughly equal share of the risk.
• 3Return stacking adds the position without subtracting the core. The real obstacle has always been funding it without selling what you own. RSSX seeks to deliver $1.00 of core U.S. stocks and $1.00 of the gold and Bitcoin strategy per dollar invested, layering a non-sovereign currency on top of equity exposure rather than carving one out of it.

¹ Annualized return of a continuous gold futures contract, 1975 to 2026. Source: Bloomberg. Calculations by Return Stacked® Portfolio Solutions. Gross of fees and transaction costs. Past performance is not indicative of future results.

² Growth of above-ground gold stocks through newly mined metal, estimated at roughly 1.8% per year against a year-end 2025 stock of about 219,891 tonnes. Source: World Gold Council, “Gold Market Primer: Market Size and Structure.”