Build a "double hedge" strategy by simultaneously holding technology stocks and Bitcoin—Investment framework presented by a Goldman Sachs executive

Goldman Sachs’s Global Hedge Fund Division Head recently provided a detailed outlook on comprehensive portfolio construction in an environment of increasing market volatility. Tony Pasquariello’s strategic framework is characterized by an unconventional approach that combines traditional equity investments with cryptocurrencies.

U.S. Technology Stocks Continue Their Upward Trend, but a Summer Adjustment Is Expected

Against the backdrop of a rebound in the S&P 500 and new highs in the Nasdaq (NDX), Pasquariello maintains a bullish stance on U.S. stocks, particularly in the technology sector. His analysis indicates that three main drivers support stock prices: ongoing growth expectations related to AI, steady capital inflows, and a divergence between the stock market and the real economy during periods of slowing employment growth.

However, he anticipates a short-term range-bound market in August and technical challenges in September. Caution is advised, considering the recent sharp rebound and the potential for a correction phase.

Positioning Gold, Silver, and Bitcoin (BTC) as a “Trinity of Hedge Assets”

The core of the strategy involves holding all three assets simultaneously: gold, silver, and Bitcoin (currently at around $90.42K). Tony Pasquariello reveals that this combination is intended to serve as a defensive layer for a “hedged long” approach toward the second half of 2025.

Particularly in market environments described as “nervous and volatile”—where liquidity deteriorates and positioning risks increase—these three assets are believed to act in a complementary manner. The strategy aims to absorb cryptocurrency volatility through traditional precious metals while also ensuring Bitcoin’s growth potential.

A Four-Pillar Composite Strategy to Cover “Partial Underperformance”

Pasquariello’s framework consists of the following four elements:

First Pillar: Long U.S. equities (technology-focused)
Remain bullish but emphasize sector selection importance.

Second Pillar: Long positions in store-of-value assets (gold, silver, BTC)
Serve as a hedge against market uncertainty.

Third Pillar: Modest-sized short positions on the U.S. dollar
Slightly adjust for excessive dollar strength.

Fourth Pillar: Long global curve steepeners
Expose to steepening of the interest rate curve.

He acknowledges that these individual components may underperform on a weekly basis but concludes that a combined approach is the “optimal hedge” to navigate market fluctuations.

Monitoring Labor Market and Futures Market Risks

While maintaining a bullish outlook on growth trends into the second half of 2025, there is also a focus on the potential slowdown in the U.S. labor market and the positioning risks from systematic traders. These challenges justify the inclusion of gold, silver, and Bitcoin as a three-asset store of value, serving as a hedge to maintain stability and justify hedge costs.