[ad_1]
It's no secret that one of the hallmarks of Bitcoin and all cryptography markets is their volatility, as they experience significant pricing cycles at a rapid pace, limiting investment in emerging technologies for the bravest.
Despite this, recently published studies indicate that the risk-return ratio of Bitcoin is much higher than that of most traditional assets, which can comfort crypto investors who fear that increased volatility will translate into potential losses.
Bitcoin (BTC) has peaked since the beginning of the year despite widespread market recovery
It is important to note that the positive benefit / risk ratio of Bitcoin compared to other assets has been largely influenced by the massive price spikes of crypto-currency since its inception, which have made BTC a technology niche instead of a traditional investment. asset that is closely scrutinized by retail and institutional investors.
In 2017, the rise of Bitcoin to nearly 20,000 dollars placed the cryptocurrency on the radar of the whole world, and the crash which followed testified of the great volatility of the crypto, in spite of its cases of use promising and its huge potential in the long run.
This crash, which propelled the cryptocurrency to $ 3,200 by the end of 2018, left a bad taste in the mouths of many investors and seems to have confirmed the negative biases of many economists and Bitcoin bears who disdained the technology number of reasons.
Despite this, in recent weeks, Bitcoin has recorded a strong recovery allowing it to set new highs since the beginning of the year, at around $ 8,300. The latter rise significantly altered market sentiment and led many investors to believe that the next uptrend was coming.
Despite massive price volatility, BTC's risk / return ratio is much higher than most traditional assets
Recent research conducted by Binance's cryptocurrency research branch highlights Bitcoin's historical profitability, as well as the extent to which cryptocurrency volatility is justified by a high risk / return ratio.
"Despite its riskiness, Bitcoin $ BTC has generated much higher returns than most traditional assets over the past two years, based on the following risk indicators / ratios," said Binance Research in a recent tweet. .
Despite its perceived risks, Bitcoin $ BTC generated returns well above those of most traditional assets over the past two years, based on the following risk indicators / ratios. pic.twitter.com/yXVKpcNvTO
– Binance Research (@BinanceResearch) May 15, 2019
The graphs in the tweet above give some interesting statistics on BTC's performance against other major assets, showing that Bitcoin's returns of nearly 400% over 2 years far outweigh the technology stocks – 46% – and all US stocks. market – 30%.
In addition, while weighing the volatility of different asset classes using the Sortino ratio, used to measure the positive volatility of an asset, bitcoin has a positive measure of 283%, while technology stocks are ranked positive by 190% and the US stock market aggregate posted a positive ranking of 136%.
Looking at these data, it becomes clear that Bitcoin is firmly committed to a long-term uptrend, despite the bear market that has emerged since the end of 2017, and that it is likely to extend this momentum. on the rise, as it continues to spur more and more adoption and engages investments from more institutional groups.
Selected image of Shutterstock.
[ad_2]
Source link