30s Summary

The New York Digital Investment Group (NYDIG) has stated that Bitcoin is the best investment in terms of returns, displaying its value via the Sharpe ratio measurement. The Sharpe ratio weighs the returns of an investment against its volatility. The research conducted by NYDIG shows that Bitcoin outperforms other investment types across different periods, despite its volatility. They also reported that Bitcoin remains the highest performing investment of this year, despite a slower third quarter. Bitcoin’s price recently peaked at $63,150 before falling slightly.

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The New York Digital Investment Group (NYDIG) says Bitcoin is the top dog in terms of returns, even with its ups and downs. In a recent analysis, Greg Cipolaro, who’s the big guy for research at NYDIG, said Bitcoin really stands out for its returns compared to other types of investments when you look at something called the Sharpe ratio.

Now this Sharpe ratio thing is a way folks in finance can check out the performance of an investment compared to how risky it is. Basically, it’s about weighing the returns against the volatility of those returns. A higher Sharpe ratio means better performance when you take the risk into account.

Cipolaro used this Sharpe ratio to check out other types of investments like stocks and bonds over different periods of time. He concluded that Bitcoin trumps just about every other type of investment, no matter how you spin it.

He did mention that gold has a slightly higher Sharpe ratio over the past year, but the difference is so tiny, it’s like flipping a coin.

In doing this research, Cipolaro was responding to a note from Goldman Sachs earlier in the month. They said that even though Bitcoin’s value has gone up 40% since the start of the year, this still doesn’t make up for its volatility. Cipolaro disagrees. He says the rewards with Bitcoin are totally worth the risk.

He also added that while the Sharpe ratio is handy for looking at risk-adjusted returns, what really matters at the end of the day is how much you actually make. Plus, the Sharpe ratio doesn’t show all the possible risks, like someone stealing your stuff.

Earlier this month, NYDIG reported that Bitcoin is still the best-performing investment so far this year, even with a comparatively lackluster third quarter.

In recent trading news, Bitcoin’s price hasn’t seen much action following a quiet weekend. After peaking at $63,150, it’s fallen back a bit to $62,560.

Source: Cointelegraph