Bitcoin ranks as top-performing asset despite volatility

Bitcoin (CRYPTO:BTC) continues to be the best-performing asset for returns, despite its notorious volatility, according to a recent analysis by the New York Digital Investment Group (NYDIG). 

Greg Cipolaro, Global Head of Research at NYDIG, highlighted Bitcoin's performance across various asset classes, using the Sharpe ratio, a measure of risk-adjusted returns.

In the report, Cipolaro concluded that Bitcoin "stands apart from the crowd" for its returns across multiple timeframes. 

The Sharpe ratio, which assesses whether an asset’s returns justify its risk, shows Bitcoin consistently ranking favorably against other assets, including equities and bonds.

Cipolaro challenged a recent Goldman Sachs note that suggested Bitcoin's 40% rise year-to-date did not adequately compensate for its volatility. 

He argued that Bitcoin’s price volatility is justified by its significant returns, stating, "The risks (price volatility) that Bitcoin investors endure are more than made up for in terms of returns."

Although Cipolaro acknowledged that gold had a slightly higher Sharpe ratio over the past 12 months, he dismissed the difference as marginal, emphasizing that while risk-adjusted returns are important, absolute returns ultimately determine financial success.

The report further pointed out that Bitcoin remains the top-performing asset in 2024, even after a relatively weak third quarter. 

Bitcoin traded flat over the past day, retreating from an intraday high of $63,150 on October 13, but continues to lead the asset performance race in the year-to-date analysis.

At the time of writing, the Bitcoin price was $64,025.74.