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 property. Which means, relative to its volatility, bitcoin has delivered distinctive returns over the historic interval.
Technique (MSTR), which maintains important bitcoin publicity by way of company holdings, follows carefully 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 price 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 information is present as of Aug. 14, for securities and Aug. 15, for bitcoin, in line with 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 worth 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 risky than Bitcoin, which exhibits the cryptocurrency is turning into extra of a mature asset class.
In contrast, MSTR’s implied volatility is greater at 56%, as it is a leveraged bitcoin proxy, however this determine is nicely beneath the extremes seen prior to now 12 months, with 140% in December 2024 and over 120% in April 2025, in line with the Technique dashboard.
From a valuation perspective, MSTR’s a number of to web asset worth (mNAV) sits at 1.61 following its current Q2 earnings name. The corporate has acknowledged it won’t 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 popular inventory and to pay curiosity on its debt obligations.
Yr-to-date bitcoin is up 27%, whereas MSTR is up 24%.
