Bitcoin (BTC) Is the Best-Performing Asset for Returns Despite Its Volatility, NYDIG Says

In an analysis published on Oct. 11, Greg Cipolaro, Global Head of Research at NYDIG, said that Bitcoin BTC $63,868 “stands apart from the crowd” for its returns

input: Bitcoin price hit a new all-time high above $63,000 on Oct. 13 as the apex crypto continued to post strong gains despite warnings from some analysts.

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD rising to an intraday peak of $63,150 on Binance before quickly pulling back.

The move marked the first time that Bitcoin had crossed the $63,000 threshold since April this year, with the token subsequently losing around 50% of its value in just two months.

Now, however, the narrative appeared to be shifting once again as Bitcoin recovered its losses and began making new all-time highs.

Relative strength index (RSI) for BTC/USD 1-day chart (Binance). Source: TradingView

According to an analysis by the New York Digital Investment Group (NYDIG), Bitcoin was also outperforming other asset classes in terms of risk-adjusted returns.

Using the Sharpe ratio, which measures the ratio of excess returns to the volatility of those returns, NYDIG found that Bitcoin had a significantly higher ratio compared to equities, bonds and other assets over various holding periods.

Only gold had a slightly higher Sharpe ratio over the past 12 months, although the difference was so small that the two were practically on par, NYDIG noted.

“Bitcoin ranks favorably compared to nearly every asset class on every metric over every time frame,” NYDIG concluded.

The strong performance of Bitcoin in 2022 has come despite warnings from some analysts that the token’s gains were unsustainable and could lead to another downturn.

In a note on Oct. 7, Goldman Sachs stated that despite being up 40% year-to-date, Bitcoin's performance was not sufficient to compensate for its volatility.

However, NYDIG highlighted that absolute returns were ultimately what mattered for meeting financial obligations, and that the analysis using the Sharpe ratio did not capture all types of risk an investor might face.

Related: BTC price eyes sub-$65K hurdles as metric hints Bitcoin 'going to rip'

In a report earlier this month, NYDIG analysts also noted that Bitcoin remained the best-performing asset year-to-date, even after a “seasonally weak” third quarter.

Bitcoin price remained largely flat over the past 24 hours, following a tightly range-bound weekend. The token briefly rallied to highs of $63,150 during late trading on Oct. 13 before pulling back to trade at $62,560 at the time of publication.

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