[NYDIG: Sharpe ratio shows Bitcoin returns are "different" and can compensate for volatility risk] On October 14, according to data from New York Digital Investment Group (NYDIG), despite its high volatility, Bitcoin is the asset with the highest return rate. In an analysis report released recently, Greg Cipolaro, head of global research at NYDIG, said that Bitcoin's returns are "different" and compared it with other asset classes using the Sharpe ratio. This ratio is used in finance to assess the performance of an asset relative to its risk. Specifically, it calculates the ratio of excess returns to the volatility of these returns. The higher the Sharpe ratio, the better the risk-adjusted performance. Cipolaro provides the Sharpe ratios of other asset classes (including stocks and bonds) during different holding periods, using monthly total returns to create a rolling Sharpe ratio. He concluded from the data: "Compared to almost all asset classes, Bitcoin is in a favorable position for every indicator in every time frame." Cipolaro pointed out that the Sharpe ratio of gold in the past 12 months was slightly higher, but the two were so close that the gap was "insignificant." On October 7, a Goldman Sachs report said that despite Bitcoin's 40% increase so far this year, its performance is not enough to compensate for its volatility. Cipolaro refuted: "The analysis shows the opposite. The risk (price volatility) borne by Bitcoin investors is compensated in terms of returns." Cipolaro also pointed out that while the Sharpe ratio is useful for comparing risk-adjusted returns, absolute returns are ultimately key to meeting financial obligations. He added that this indicator does not reflect all the risks that investors may face, such as censorship or asset seizure. (Cointelegraph)

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