Long Term Holder Supply
14.52M
Miner Outflows
45,725.01 -23.90%
Options 25 Delta Skew
0.0
Sharpe Ratio
1.952 +7.76%
Bitcoin Dominance
57.5% +0.33%
Fear and Greed Index
75 +0.00%
Mayer Multiple
1.37 +0.00%
US vs Offshore Trading Volume
9.24%
Circulating Supply
19,814,268.75 +0.00%
Halving Countdown
19.3%
Hashrate vs Price
747.07 EH/s -8.82%
Node Map
20,840
Difficulty Estimator
79,679,234,551,296 +0.00%
Miner Revenue
$44,891,990.33 -8.45%
Network Difficulty
110.45T +0.00%
Puell Multiple
1.11 -8.48%
Exchange Trading Volume
$103.23B +42.50%
Exchange Trading Volume BTC
$42.62B +93.06%
Exchange Volume BTC Dominance
41.2% +35.48%
Monthly Exchange Volume
$1.88T
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Bitcoin hits a new ATH of $109,088.75!
MicroStrategy has acquired 11,000 BTC for ~$1.1 billion. View their new purchase on Bitcoin Treasuries.
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Sharpe Ratio stats
1.952
+7.76%
4 days
Terminal Stats
7
0
The Sharpe Ratio is a widely used financial metric that measures the performance of an investment relative to its risk. It evaluates how much excess return an asset provides for every unit of risk (volatility) it takes on, helping investors determine whether an asset’s returns are worth its inherent uncertainty. A higher Sharpe Ratio indicates better risk-adjusted performance, while a lower ratio suggests that the risk may outweigh the returns.
When applied to Bitcoin, the Sharpe Ratio offers a framework for assessing whether Bitcoin’s often dramatic price swings are justified by its returns. It helps investors understand if Bitcoin’s role in a portfolio enhances overall performance or adds unnecessary risk.
How is the Bitcoin Sharpe Ratio Calculated?
The Sharpe Ratio is calculated by taking the difference between an asset’s expected return and a baseline return, often referred to as the risk-free rate (the return from a virtually risk-free investment, like government bonds). This difference is called the excess return.
Next, the excess return is divided by the asset’s volatility, which measures how much its price fluctuates over time. Volatility serves as a proxy for risk—the greater the price swings, the riskier the asset.
In short:
Expected Return represents the average return you anticipate from the investment.
Risk-Free Rate is the return you’d get from a safe, stable investment.
Volatility measures how unpredictable or risky the investment is.
The result is the Sharpe Ratio, which tells you how much extra return you’re getting for each unit of risk you take on. A higher Sharpe Ratio means better risk-adjusted performance, while a lower one suggests that the investment’s risk may not be worth its rewards.
The Sharpe Ratio is a powerful tool for understanding Bitcoin’s value in a portfolio. Given Bitcoin’s substantial volatility, this metric provides insight into whether its returns are sufficient to offset the risks. A high Sharpe Ratio suggests that Bitcoin delivers strong performance relative to its volatility, making it an attractive option for long-term investment. Conversely, a low Sharpe Ratio may indicate that Bitcoin’s price swings outweigh its potential rewards.
The Bitcoin Sharpe Ratio helps investors navigate Bitcoin’s volatility with greater clarity. A rising Sharpe Ratio signals that Bitcoin is becoming more effective at rewarding risk, reflecting a favorable balance of return versus uncertainty. Meanwhile, a declining ratio might prompt caution, encouraging careful consideration of market conditions while maintaining a long-term commitment to Bitcoin investment.