Bitcoin's Risk-Adjusted Returns Turn Negative Amid Challenging Market Conditions

Bitcoin's risk-adjusted returns, as indicated by its Sharpe Ratio, have once again turned negative, mirroring trends observed during the bear markets of 2018 and 2022. According to NS3.AI, this development suggests that Bitcoin is currently producing minimal excess returns relative to its risk, underscoring a difficult market environment. Historical patterns reveal that a negative Sharpe Ratio can persist for extended periods, cautioning against viewing it as a signal for an imminent market recovery.