Analysis: Bitcoin returns and risks do not match, similar to the situation in 2022 According to CoinDesk, CryptoQuant data shows that Bitcoin's Sharpe ratio has penetrated deep into negative territory, reaching levels seen during the 2018-2019 and 2022 market crashes, indicating poor risk adjusted performance and a mismatch between current high volatility and weak returns. This indicator measures the ratio of excess returns to volatility relative to the risk-free rate. Turning it into a negative value means that the returns obtained from holding Bitcoin are no longer sufficient to compensate for the risk of drastic price fluctuations. Although the price of Bitcoin has fallen from its historical high of over $120000 in October 2025 to around $90000, market volatility remains high. Historical data shows that the negative state of Sharpe ratio may continue for several months after prices stop falling sharply, such as during the long bear markets of late 2018 and 2022. Analysts point out that this ratio is not an accurate bottom signal, but it shows that risk return has reset to the level before the major market trends in history started. The market usually focuses on whether the ratio can continue to rebound to a positive area, which usually means that returns are beginning to exceed volatility, which is more in line with the start of a new bull market. There are currently no signs of such a turnaround.