- Bitcoin’s higher Sortino Ratio gave it an edge over traditional financial instruments.
- Bitcoin’s 30-day volatility fell to 15.47%, half of what it was a year ago.
Winds of change were blowing in the crypto market, just like Bitcoin [BTC]Once notorious for its high risk factor, it began to emerge as an attractive long-term investment vehicle.
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Bitcoin is becoming a reliable bet
According to a message from an analysis company in the chain InTheBlok dated October 11, the king coin had the highest Sortino ratio compared to regular financial instruments on the market.
Bitcoin’s value of 0.57 turned out to be the best in the list of major stock indices such as the Nasdaq 1oo and S&P 500 and the US Dollar Index (DXY).
Source: IntoTheBlock
The Sortino ratio measures the risk-adjusted return of an investment object and is widely used in the traditional financial world. Simply put: it compares the performance of the asset relative to its downside risk.
The Sortino ratio is used to evaluate investment portfolios with high volatility. The investor prefers the one with the higher Sortino ratio because it means that the investment yields more returns per unit of the bad risk he faces.
Clearly, Bitcoin’s higher Sortino Ratio gave it an edge over traditional financial instruments. Furthermore, many of these entities showed negative Sortino ratios, suggesting that investors may not be rewarded at all for the risk taken on the investment.
Wild swings a thing of the past?
The sharp decline in potential risks with cryptos could be linked to the market’s continued low volatility regime. Apart from periodic periods of high activity, Bitcoin has remained subdued over the past two quarters.
At the time of writing, Bitcoin’s 30-day volatility was 15.47%, half of what it was a year ago. Furthermore, Bitcoin was less volatile than technology stocks, and closer to other mainstream assets.
Source: IntoTheBlock
Read BTC price forecast for 2023-2024
Will ownership increase further?
Higher risk-adjusted returns boded well for the future adoption of the world’s largest cryptocurrency. After all, who wouldn’t want to invest in risk-free assets?
This was also reflected in the growing ownership of Bitcoin. Despite the market downturn, non-zero balance wallets are on the rise, according to data from Glassnode.
Source: Glassnode