Bitcoin: "Gold on Steroids" with Surging Institutional Investmen

10 בדצמ׳ 2023

Bitcoin has often been compared to gold over the years. Initially viewed as a "safe haven" similar to gold, analysts are now comparing the two investments to determine if Bitcoin meets the criteria of being "gold on steroids." In the past 5 years, up to November, Bitcoin's Sharpe ratio has competed favorably when compared to gold and other proven assets in the market. The Sharpe ratio is defined as the difference between risk-free and investment returns divided by the standard deviation of the investment. Timmer argues that Bitcoin is more volatile than most other assets, but this volatility impacts both directions, and BTC investments come with their own risk-reward profile, akin to what has been observed over the past decade.

According to a report by CoinShares, institutional investors continue to pour funds into Bitcoin funds, with a weekly inflow of $132.8 million recorded as of December 4th. At the time of writing, the price of Bitcoin stands at $44,162 USD on Binance.