Bitcoin: The asset with the higher return according to NYDIG

Bitcoin: The asset with the higher return according to NYDIG

According to an analysis published by the New York Digital Investment Group (NYDIG), bitcoin is proving to be an asset with exceptional returns, despite being known for its high volatility. Greg Cipolaro, global head of research at NYDIG, argues in an Oct. 11 report that bitcoin "stands out from the crowd" with its returns compared to other asset classes.

Cipolaro compared bitcoin using the Sharpe ratio, an important metric for evaluating an asset's performance relative to its risk. This ratio calculates excess returns to volatility, and the higher its value, the better the asset performs relative to risk. In his analysis, he found that bitcoin compares favorably to almost every asset class in every time frame and every metric.

While gold has posted a slightly higher Sharpe ratio over the past 12 months, Cipolaro noted that the difference between the two assets is so small that it is more of a "hair splitting" than a true outperformance of gold.

Cipolaro was also responding to Goldman Sachs' October 7 commentary, which argued that despite bitcoin's 40% rise since the start of the year, its performance is not enough to offset volatility. "Our analysis shows the opposite: the risks associated with price swings that investors face are more than offset by the returns," he added.

While the Sharpe ratio provides valuable information on risk-adjusted returns, Cipolaro stressed that absolute returns are key to meeting financial obligations. He also pointed out that this metric does not capture all types of risk, such as censorship or potential asset seizures. In another report issued earlier in October, NYDIG analysts concluded that bitcoin remains the best performing asset this year, despite a "seasonally weak" third quarter. In recent days, bitcoin's price has been flat. Although on Saturday, October 13, it reached an intraday high of $63,150.

Thus, bitcoin not only stands out from the crowd, but despite its volatility, it holds its position as one of the most interesting and best-performing investment assets on the market.

*This is not investment advice.

Coingarage Team