Bitcoin’s risk-adjusted performance continues to surpass that of most traditional and digital assets, with the cryptocurrency now posting a Sharpe ratio of 2.15, the highest among major asset classes globally. This means that for every unit of volatility, Bitcoin has delivered more than twice the excess return above the risk-free rate — a benchmark considered “excellent” by portfolio managers. MicroStrategy (MSTR), the Nasdaq-listed software company led by Executive Chairman Michael Saylor, follows closely with a Sharpe ratio of 2.00. By comparison, the Sharpe ratios of many large-cap technology companies — including Apple, Microsoft, and Alphabet — are clustered near 1.0. A significant driver of this trend is the sharp contraction in volatility over the past year. G.business reports this, citing Renewz.

Volatility compression signals market maturity

As of August 14, 2025, Bitcoin’s implied volatility has dropped to 37%, a level not seen since mid-2023. This suggests that traders and institutional investors are expecting a relatively stable short-term price environment. Analysts note that such low volatility levels in Bitcoin are rare and often precede either a period of accumulation by long-term holders or a significant breakout in price.

MicroStrategy’s implied volatility remains higher at 56%, reflecting its leveraged exposure to Bitcoin through corporate treasury holdings and debt-financed purchases. However, this figure marks a steep decline from previous peaks — 140% in December 2024 and over 120% in April 2025 — according to the company’s own Strategy dashboard.

Vetle Lunde, Senior Analyst at K33 Research, interprets these numbers as evidence of structural maturity in the Bitcoin market:

“Low volatility is maturity. Over the past six months, 30% of the 100 largest companies in the S&P 500 have been more volatile than Bitcoin, which is a clear sign that the asset is no longer purely speculative but increasingly institutionalized.”

Historical performance and sector comparison

In historical context, Bitcoin’s current Sharpe ratio surpasses that of gold during its peak performance years, as well as outperforming the S&P 500’s five-year average. Large-cap tech stocks, once considered the gold standard for risk-adjusted returns, now trail behind as the crypto asset demonstrates resilience amid changing macroeconomic conditions, including fluctuating interest rates and tighter liquidity in traditional markets.

MicroStrategy, meanwhile, has transformed itself from a software analytics company into a publicly traded Bitcoin proxy. Its mNAV (market value to net asset value) currently stands at 1.61, and management has pledged not to issue new shares in an at-the-market offering until this ratio exceeds 2.5, except for dividend obligations on preferred stock and debt interest payments.

Year-to-date performance and investor sentiment

So far in 2025, Bitcoin has risen 27%, while MicroStrategy’s stock has gained 24%, significantly outperforming the Nasdaq Composite and the broader U.S. equity market. Institutional adoption continues to grow, with ETF inflows contributing to the stability in volatility. Market participants point out that Bitcoin’s correlation with equities has weakened since Q2, making it an increasingly attractive diversification tool.

According to the Strategy dashboard, a Sharpe ratio above 2.0 places both Bitcoin and MSTR in the top tier of all tracked assets, from commodities to bonds. For long-term investors, these figures suggest that the risk-reward profile for both remains compelling, even after their substantial gains.

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