Bitcoin Surges 40% in 2023: Analyzing Its Volatility and Return-to-Risk Ratio Compared to Gold

According to a recent report from COINOTAG, Goldman Sachs has highlighted that Bitcoin’s price has surged over 40% this year, significantly surpassing the performance of leading stock indexes, fixed-income assets, gold, and crude oil. Despite this notable year-to-date gain, the analysis indicates that Bitcoin’s high volatility has yielded a return-to-risk ratio of under 10%, which starkly contrasts with gold’s robust risk-adjusted return of approximately 20%. This discrepancy suggests that Bitcoin, while exhibiting impressive price movements, lacks the stability typically expected of a **safe-haven investment**. Consequently, many traditional financial institutions have opted to utilize **arbitrage strategies** to navigate Bitcoin’s price fluctuations, aiming to mitigate the risks associated with its erratic behavior. As the cryptocurrency market evolves, understanding these dynamics becomes crucial for investors evaluating the viability of Bitcoin as part of a diversified portfolio.