Bitcoin’s performance review: leading on risk adjusted returns

Not bearish on Bitcoin

Sometimes I open Twitter and I see people in panic over Bitcoin’s price “crashing” or “losing a key support level”. Then I look at the chart and I see that they are referencing like BTC going from $71,000 to $68,000… talk about missing the forest for the trees.

If you aren’t a day trader it doesn’t make sense to obsess about those details.

Because when you look at the big picture it turns out Bitcoin is doing great. On some metrics it is doing better than NVIDIA. And some Bitcoin derivative bets are even off the charts.

So let’s review how Bitcoin is performing and why it is not a fluke.

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Bitcoin’s performance review: leading on risk adjusted returns

The takeaway

Bitcoin was beaten by Nvidia on total returns. But over the same period Bitcoin is still delivering higher risk adjusted returns than AI.

On average Bitcoin tends to deliver great risk adjusted returns in the thick of a bull market and perform adequately otherwise. That’s probably the number one reason the institutional demand is strong for BTC.

For the bigger picture Bitcoin is a main beneficiary of the global liquidity trade. So as long as you believe that central banks and governments will inject more liquidity in the system then there is no reason to be bearish on Bitcoin. 

But let’s look at the details.

The highest risk adjusted returns