Comparing Bitcoin’s annual risk return to other assets


Fidelity Investments is one of the world’s largest asset management companies, with $4.5 trillion in assets under management. Recently, Jurrien Timmer, global head of macro at Fidelity, released a risk-reward analysis of various assets, including Bitcoin.

According to Bitcoin Magazine, Timmer said that Bitcoin’s risk reward is “in another universe.” Report on X (Twitter).

Essentially, financial institutions analyze an asset’s risk and return based on annual volatility and annual returns. Annual rate of return is the average amount of money an investment generates each year over a specific period of time. Higher annual returns mean better long-term returns.

Annual volatility, on the other hand, measures an asset’s price fluctuations over a year. It represents investment risk. High volatility indicates greater price swings and therefore a greater potential for losses or profits.

Additionally, analysts often use standard deviation to assess volatility. A larger deviation indicates higher volatility and vice versa.

Bitcoin’s Annual Risk Return Compared to Other Assets

It is worth noting that Bitcoin’s risk-return is set at an annualized return of around 60%, with annualized volatility above 69 standard deviations. This is indeed the result of “another universe,” as Julien Timmer said.

In particular, Fidelity’s chart analyzes the results for a number of financial assets between 2020 and October 29, 2023, along two axes:

– The X (horizontal) axis represents risk, illustrating annual fluctuations via standard deviation over time.

– The Y-axis (vertical) represents rewards, measured as annual returns on each given asset.


Risk and reward: 2020-2023, weekly data | Source: Fidelity Investments

Interestingly, the second best performing asset is SPX on the stock market, with returns between 16-26% and risk between 18 and 24 standard deviations. China is the second most risky, with annual fluctuations between 25 and 28, and negative returns accumulated over the three-year period.

You can check coin prices here.

Join Bitcoin Magazine on Telegram:

Follow on Twitter:

Follow Douyin:


According to Finbold


Source link

Related Posts

NEAR and Polygon collaborate on zero-knowledge proof innovation

[ad_1] The NEAR Foundation has partnered with Polygon Labs to develop zkWASM, a cutting-edge zero-knowledge solution that enhances the interoperability and security of WASM chains. The NEAR…

Amazon, Olympus challenges OpenAI, Microsoft’s AI dominance

[ad_1] Amazon, Olympus challenges OpenAI, Microsoft’s AI dominance AmazonThe world’s largest online retail and technology provider, through its web services arm AWS (Amazon Web Services), recently revealed…

Financial giant Fidelity responds to 9 common misconceptions and criticisms about Bitcoin

[ad_1] Financial services giant Fidelity has addressed nine common criticisms and misconceptions about Bitcoin, highlighting that some of them are “unfounded or unlikely to be…

Third-quarter profits lower, revenue higher, according to

[ad_1] ©Reuters. Lyft reports: Third-quarter profits down, revenue up – Lyft (NASDAQ: ) on Wednesday reported third-quarter results that missed analysts’ expectations and revenue that beat…

CEHV partners say future uncertain during Genesis shutdown

[ad_1] Many analysts are speculating on the outcome of the spot Bitcoin ETF race, and CEHV partner Adam Cochran shared his views in a Nov. 8 X…

Second-quarter profits lower, revenue higher, according to

[ad_1] ©Reuters. Take-Two reports: Second-quarter profits fall, revenue rises – Take-Two (NASDAQ: ) on Wednesday reported second-quarter results that missed analysts’ expectations and revenue that beat…

Trả lời

Email của bạn sẽ không được hiển thị công khai. Các trường bắt buộc được đánh dấu *