Disclaimer: The analyst who wrote this article owns shares in Strategy.
Bitcoin’s Performance
Bitcoin’s risk-adjusted performance remains impressive, showcasing a Sharpe ratio of 2.15, which is the highest among major assets. This indicates that, in relation to its volatility, bitcoin has provided remarkable returns over the historical timeframe.
Strategy’s Performance
Following closely is Strategy (MSTR), which has substantial bitcoin exposure through its corporate holdings, reporting a Sharpe ratio of 2.00—indicating a similarly strong performance.
Understanding Sharpe Ratios
A Sharpe ratio of 2 signifies that an asset has produced twice the excess return over the risk-free rate for each unit of volatility incurred, which is deemed excellent in terms of risk-adjusted performance.
Context of Tech Performance
For reference, numerous large-cap tech companies are grouped around a Sharpe ratio of 1.0.
The data is up-to-date as of August 14 for securities and August 15 for bitcoin, as per the Strategy dashboard.
Volatility Trends
A crucial factor recently for both assets has been volatility compression. Bitcoin’s implied volatility has decreased to 37%, nearing a two-year low, suggesting that market participants anticipate more stable price movements in the near future.
Vetle Lunde, an analyst at K33 Research, states, “low volatility is maturity” and points out that over the last six months, 30% of the 100 largest S&P 500 companies have experienced greater volatility than Bitcoin, indicating that the cryptocurrency is evolving into a more mature asset class.
MSTR’s Volatility
In contrast, MSTR exhibits a higher implied volatility of 56%, as it acts as a leveraged bitcoin proxy. However, this figure remains significantly below the extremes experienced over the past year, including 140% in December 2024 and above 120% in April 2025, according to the Strategy dashboard.
Valuation Insights
From a valuation viewpoint, MSTR’s multiple to net asset value (mNAV) stands at 1.61 following its latest Q2 earnings call. The company has indicated that it will refrain from conducting an at-the-market offering of its common stock until its mNAV exceeds 2.5, except for the purpose of paying dividends on its perpetual preferred stock and servicing its debt obligations.
Year-to-Date Performance
As of now, bitcoin has risen by 27% year-to-date, whereas MSTR has increased by 24%.
