Bitcoin’s Sharpe Ratio slides to lowest since 2022. Here’s what it means.
A reading that negative means investors would have been better off in risk-free assets like 10-year U.S. Treasuries.
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Summary
- Bitcoin has fallen 28% this year, and its 365-day Sharpe Ratio has plunged to nearly minus 20, signaling extremely poor risk-adjusted returns.
- A Sharpe Ratio that negative means investors would have been better off in risk-free assets like 10-year U.S. Treasuries, which currently yield about 4.45%.
- Similarly depressed Sharpe Ratio readings in 2015, 2019 and 2022 aligned with bear-market bottoms.
