Frustrated man holding up papers in both hands, image of a bold bar in bubble on the left, image of bitcoin in bubble on the right
In 2022, Canadians who owned a classic 60/40 portfolio learned an uncomfortable lesson — that is, stocks and bonds can fall at the same time. Both the S&P/TSX Composite and Canadian bond indexes posted negative returns that year, and the textbook diversification story, that bonds cushion equities, didn’t hold up.
That experience is partly why gold and, more recently, bitcoin keep coming up in conversations about Canadian investment portfolios. Gold hit fresh record highs in 2024 and 2025, and while crypto has lost some of its lustre, it remains popular with investors. According to the Bank of Canada, approximately 1 in 10 Canadians owned bitcoin (1) as recently as 2023, and survey data from Koinly (2), a crypto tax software platform, shows that over 40% of Canadians hold some type of crypto asset.
Morningstar’s portfolio research argues that while diversification certainly paid off in 2025 (3), with both international stocks and gold outperforming the U.S. market, not all asset classes are worth adding to your portfolio.
So where does that leave a Canadian with a TFSA, an RRSP and a balanced index fund? The honest answer is that a small allocation to gold and possibly crypto may be helpful, but a large one almost certainly will not.
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The traditional balanced portfolio assumes stocks and bonds will behave differently during periods of market stress. While that relationship has often held in the past, 2022 demonstrated that it is not guaranteed, when rising inflation and interest-rate shocks pushed both asset classes lower simultaneously.
For investors approaching retirement or already drawing income from their portfolios, such a synchronized decline can be especially painful.
Neither gold nor crypto is driven by the same forces as stocks or bonds. Gold has historically responded to factors such as real interest rates, currency movements and geopolitical uncertainty. Bitcoin’s drivers remain the subject of debate, but its performance has frequently diverged from traditional asset classes over longer periods.
A diversified asset doesn’t necessarily need to outperform, but it should behave differently when the rest of the portfolio is struggling.
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What gold actually does and doesn’t do in a portfolio
Gold’s primary role is not long-term growth. Over extended periods, equities have generally outperformed gold and produced stronger inflation-adjusted returns. Gold’s value comes from its ability to provide a negative correlation to the stock market, especially during inflation shocks and periods of geopolitical instability.
There are several ways Canadian investors can hold gold inside an RRSP or TFSA. Physical gold bullion that meets the Canada Revenue Agency’s purity standards is eligible for registered accounts under CRA rules. Gold ETFs listed on Canadian exchanges, as well as shares of gold mining companies, are also RRSP- and TFSA-eligible and trade like any other security. Each option has pros and cons. For example, bullion has storage and insurance costs, ETFs add a small management expense ratio (MER) and mining stocks add company-specific risk on top of the gold price.
For most Canadians, a single-digit allocation through a low-cost, physically backed gold ETF inside a registered account is often the simplest approach.
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Where does bitcoin fit and what are the risks?
The Canadian Securities Administrators (CSA) (4) and the Canadian Investment Regulatory Organization (CIRO) have both issued repeated investor alerts about unregistered crypto trading platforms (5), fraud risk and the volatility of crypto assets.
That does not mean you shouldn’t hold crypto in your portfolio, but you need to understand the risks. Bitcoin has experienced multiple peak-to-trough drawdowns exceeding 70% (6) in its trading history. A 1% to 2% allocation that you can afford to see fall by that magnitude is different from a 10% or 15% allocation built on the belief that the next decade will look like the last.
If you are looking for crypto that is RRSP or TFSA-eligible, you can buy spot bitcoin and Ether ETFs listed on Canadian exchanges. In fact, Canada was the first country to approve a spot bitcoin ETF in February 2021.
How much diversification is enough
One of the more useful takeaways from Morningstar’s research is that diversification has limits. Adding new asset classes can improve a portfolio’s risk-adjusted returns, but only up to a certain point. Beyond that, additional holdings often add complexity, costs and management headaches without meaningfully improving outcomes.
For many Canadian investors, the best approach is to keep the vast majority of their portfolio in broadly diversified stock and bond investments aligned with their goals, time horizon and risk tolerance. Gold and crypto, if used at all, should generally remain small positions around that core.
For example, a 5% allocation to gold and a 1%-2% allocation to crypto are enough to create a meaningful diversification tilt without overwhelming the rest of the portfolio. Larger allocations may still be appropriate for some investors, but at a certain point, they stop functioning as diversifiers and become concentrated bets.
Before you make any significant allocation changes, make sure you are speaking with a qualified investment adviser and verify that any product you’re considering is properly registered for sale in your province through the Canadian Securities Administrators’ (CSA) National Registration Search.
What to do now
Before you add gold or crypto to your portfolio, assess what you already own. Many balanced mutual funds and asset-allocation ETFs already include some exposure to commodities or gold-related investments, which means you may be more diversified than you realize.
From there, consider a few practical steps:
Review your fund holdings to see whether you already have exposure to gold or commodities
Use RRSPs and TFSAs where possible for eligible gold ETFs and Canadian-listed spot crypto ETFs
Choose your positions based on the worst-case scenario, not the best-case outcome
Use the CSA National Registration Search to confirm that the platforms, advisers and investment products you want to use are properly registered
Rebalance your portfolio at least once per year
Your goal shouldn’t be to own every available asset class. You want to build a portfolio you can stick with through both good and bad markets. For many Canadians, a small allocation to gold and perhaps a modest amount of crypto can help achieve that objective. Remember, diversification can reduce risk, but not if you’re choosing speculation over strategy.
This article is for informational purposes only and does not constitute investment advice. Talk to a CIRO-registered adviser before making changes to your portfolio.
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Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
Bank of Canada (1); Koinly (2); Morningstar (3); Canadian Securities Administrators (4), (5); Bitcoin Calculator (6)
This article originally appeared on Money.ca under the title: Do gold and crypto belong in a Canadian RRSP or TFSA — or is more diversification too risky?
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.