Source: CryptoNewsNet
Original Title: Bitcoin returns fail to match risks, just like 2022
Original Link:
Rewards for holding bitcoin are not worth the wild ride anymore.
That’s the signal from bitcoin’s Sharpe Ratio, a tool fund managers use to check if an investment’s extra profits (above safe options like U.S. Treasury bills) compensate for volatility risks.
The ratio has turned negative for bitcoin, according to data source CryptoQuant, indicating that returns no longer justify the roller coaster ride. It’s reflective of an environment where sharp intraday swings and uneven rebounds have failed to deliver returns. Prices may be well off recent highs, but volatility remains elevated, compressing risk-adjusted returns.
This comes as BTC has pulled back to $90,000 since hitting record highs above $120,000 in early October.
Similar negative Sharpe Ratio readings were observed at the depths of previous bear markets. Some analysts view the latest negative print as a sign the downtrend in BTC prices is over, and a new bull run may begin soon.
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Bitcoin returns fail to match risks, just like 2022
Source: CryptoNewsNet Original Title: Bitcoin returns fail to match risks, just like 2022 Original Link: Rewards for holding bitcoin are not worth the wild ride anymore.
That’s the signal from bitcoin’s Sharpe Ratio, a tool fund managers use to check if an investment’s extra profits (above safe options like U.S. Treasury bills) compensate for volatility risks.
The ratio has turned negative for bitcoin, according to data source CryptoQuant, indicating that returns no longer justify the roller coaster ride. It’s reflective of an environment where sharp intraday swings and uneven rebounds have failed to deliver returns. Prices may be well off recent highs, but volatility remains elevated, compressing risk-adjusted returns.
This comes as BTC has pulled back to $90,000 since hitting record highs above $120,000 in early October.
Similar negative Sharpe Ratio readings were observed at the depths of previous bear markets. Some analysts view the latest negative print as a sign the downtrend in BTC prices is over, and a new bull run may begin soon.