It\u2019s no secret that one hallmark of Bitcoin and the entire crypto markets is that they are volatile, going through major pricing cycles at a rapid speed that limits investing in the nascent technologies for only the brave of heart.<\/p>\n
Despite this, recently released research signals that Bitcoin actually has a far higher risk-return ratio than most major traditional assets, which may provide some solace to crypto investors who fear that increased volatility will lead to potential losses down the road.<\/p>\n
It is important to note that the positive risk-reward ratio that Bitcoin<\/a> has compared to other assets has been largely driven by the cryptocurrency\u2019s massive price surges that it has incurred since its inception, which have taken BTC from being a niche technology to a mainstream investment asset that is being closely looked at by retail and institutional investors alike.<\/p>\n In 2017, Bitcoin\u2019s surge to highs of nearly $20,000 put the cryptocurrency on the world\u2019s radar, and the ensuing crash served as a testament to the large volatility of the crypto, in spite of its promising use-cases and massive long-term potential.<\/p>\n This crash, which sent the cryptocurrency to lows of $3,200 in late-2018, left a bad taste in the mouths of many investors, and appeared to have confirmed the negative biases held by many economists and Bitcoin-bears who disdained the technology for a large number of reasons.<\/p>\n Despite this, over the past several weeks Bitcoin has posted a strong recovery that has allowed it to set fresh year-to-date highs around $8,300. This latest surge has shifted the market sentiment significantly and has led many investors to believe that the next bull trend is right around the corner.<\/p>\n Recent research from cryptocurrency exchange Binance\u2019s research arm puts a spotlight on just how profitable Bitcoin<\/a> has been historically, as well as how the cryptocurrency\u2019s volatility is justified by a high risk-reward ratio.<\/p>\n \u201cDespite its perceived riskiness, Bitcoin $BTC has provided far higher returns than most traditional assets over the past 2 years based on the following risk indicators\/ratios,\u201d Binance Research explained in a recent tweet.<\/p><\/blockquote>\n Despite its perceived riskiness, Bitcoin $BTC<\/a> has provided far higher returns than most traditional assets over the past 2 years based on the following risk indicators\/ratios. pic.twitter.com\/yXVKpcNvTO<\/a><\/p>\n — Binance Research (@BinanceResearch) May 15, 2019<\/a><\/p><\/blockquote>\nDespite Massive Price Volatility, BTC Has a Far Better Risk-Reward Ratio Than Most Traditional Assets<\/strong><\/h2>\n
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