Bitcoin’s Sharpe Ratio Falls to Lowest Since 2022

The Sharpe ratio measures the excess return an asset generates for each unit of volatility risk. A lower reading means investors receive poorer returns for the risk they bear. Bitcoin’s 365-day Sharpe ratio has swung sharply into negative territory, reflecting falling prices and heightened volatility in the cryptocurrency market. It has also become an important gauge of where the current bear market stands.

As of July 20, 2026, Bitcoin was down 28% for the year, while its 365-day Sharpe ratio had fallen to nearly minus 20, the lowest level since the 2022 bear market. Historical trends show that similarly extreme lows have often occurred around the time of bear-market bottoms. However, the indicator measures only risk-adjusted returns and cannot by itself confirm that prices have bottomed.