Bitcoin Sharpe Ratio Falls to Negative, High Volatility Does Not Match Returns

CryptoQuant data shows that the Sharpe ratio of Bitcoin has fallen to negative territory, reaching levels similar to the market crashes of 2018-2019 and 2022, reflecting poor performance after risk adjustment. Currently, the price of Bitcoin has fallen from its historical high of over $120000 in October 2025 to around $90000, but market volatility remains high. The negative Sharpe ratio indicates that the return on holding Bitcoin is not sufficient to compensate for its price volatility risk. Historical data shows that this indicator may remain negative for several months after the price stops falling significantly, but it is not a bottom signal. Analysts point out that a rebound in the Sharpe ratio to a positive value is usually associated with the start of a bull market, but there is currently no sign of this.