Disclaimer: The analyst who wrote this text owns shares in Technique.
Bitcoin’s risk-adjusted efficiency continues to face out, with a Sharpe ratio of two.15, the best amongst main belongings. Which means that, relative to its volatility, bitcoin has delivered distinctive returns over the historic interval.
Technique (MSTR), which maintains vital bitcoin publicity by means of company holdings, follows intently with a Sharpe ratio of two.00, reflecting equally robust efficiency.
A Sharpe ratio of two means an asset has delivered twice the surplus return over the risk-free fee for each unit of volatility taken, which is taken into account wonderful in risk-adjusted efficiency phrases.
For context, a number of large-cap tech names are clustered round a Sharpe ratio of 1.0.
The info is present as of Aug. 14, for securities and Aug. 15, for bitcoin, based on the Technique dashboard.
A key driver of late for each has been volatility compression. Bitcoin’s implied volatility has fallen to 37%, close to a two-year low, suggesting market contributors count on extra secure value motion within the brief time period.
Whereas, Vetle Lunde, an analyst at K33 Analysis, says “low volatility is maturity” and notes that over the previous six months, 30% of the 100 largest S&P 500 corporations have been extra unstable than Bitcoin, which exhibits the cryptocurrency is turning into extra of a mature asset class.
In contrast, MSTR’s implied volatility is larger at 56%, as it is a leveraged bitcoin proxy, however this determine is nicely under the extremes seen previously 12 months, with 140% in December 2024 and over 120% in April 2025, based on the Technique dashboard.
From a valuation perspective, MSTR’s a number of to web asset worth (mNAV) sits at 1.61 following its latest Q2 earnings name. The corporate has acknowledged it is not going to conduct an at-the-market providing of its widespread inventory till its mNAV rises above 2.5, apart from paying dividends on its perpetual most well-liked inventory and to pay curiosity on its debt obligations.
Yr-to-date bitcoin is up 27%, whereas MSTR is up 24%.
