Disclaimer: The analyst who wrote this article owns shares in Approach.
Bitcoin’s likelihood-adjusted performance continues to stand out, with a Sharpe ratio of 2.15, the very best among valuable sources. This means that, relative to its volatility, bitcoin has delivered distinctive returns over the historical interval.
Approach (MSTR), which maintains important bitcoin exposure thru company holdings, follows carefully with a Sharpe ratio of 2.00, reflecting similarly sturdy performance.
A Sharpe ratio of 2 means an asset has delivered twice the surplus return over the danger-free payment for every unit of volatility taken, which is taken into myth very goal genuine in likelihood-adjusted performance terms.
For context, several trim-cap tech names are clustered around a Sharpe ratio of 1.0.
The suggestions is recent as of Aug. 14, for securities and Aug. 15, for bitcoin, in step with the Approach dashboard.
A key driver of gradual for every has been volatility compression. Bitcoin’s implied volatility has fallen to 37%, advance a two-year low, suggesting market contributors assign a matter to extra stable ticket motion within the short time interval.
Whereas, Vetle Lunde, an analyst at K33 Learn, says “low volatility is maturity” and notes that at some level of the final six months, 30% of the 100 most intriguing S&P 500 corporations had been extra volatile than Bitcoin, which reveals the cryptocurrency is popping into extra of a damaged-down asset class.
By difference, MSTR’s implied volatility is elevated at 56%, because it’s a long way a leveraged bitcoin proxy, nonetheless this resolve is smartly below the extremes seen within the past year, with 140% in December 2024 and over 120% in April 2025, in step with the Approach dashboard.
From a valuation perspective, MSTR’s a pair of to fetch asset ticket (mNAV) sits at 1.61 following its most up-to-date Q2 earnings call. The firm has acknowledged this would per chance now not habits an at-the-market providing of its identical old stock unless its mNAV rises above 2.5, other than for paying dividends on its perpetual most in vogue stock and to pay passion on its debt obligations.
twelve months-to-date bitcoin is up 27%, whereas MSTR is up 24%.
