Odaily Planet Daily News Jurrien Timmer, global macro director of Fidelity Investments, recently published an article analyzing in detail the dynamic relationship between Bitcoin and gold. Timmer cited data from Fidelity Management and Research Company (FMR Co) and Bloomberg, analyzing the changing trends of the Sharpe ratio (a measure of risk-adjusted returns) of the two assets, and pointed out that their relative performance may be at a turning point.
Timmer said: "Ironically, there is a negative correlation between gold and Bitcoin. As can be seen from the figure below, the Sharpe ratios of these two assets have been leading alternately recently... It looks like Bitcoin may be the leading moment next, as its Sharpe ratio is currently -0.40, while gold is 1.33. Therefore, we may witness the handover of the baton from gold to Bitcoin."
The chart shared by Timmer shows that gold's recent return is $22.51, while Bitcoin is $13.22, of which gold's return is magnified by 4 times to reflect its lower volatility, while Bitcoin's return is not adjusted proportionally and remains 1 times.