Bitcoin returns are severely mismatched with risks, repeating the market characteristics of 2022

Jinse Finance reported that bitcoin's Sharpe ratio has dropped sharply into negative territory, reaching levels only seen during the major pullbacks of 2018–2019 and after the 2022 market crash. A negative Sharpe ratio indicates poor risk-adjusted performance: high price volatility with weak or even negative returns. This situation may persist even after prices stop falling significantly. Historically, meaningful trend reversals for bitcoin do not typically occur right after the Sharpe ratio falls below zero, but rather when it continues to recover and returns to positive territory. Even though bitcoin's current price remains above $90,000, the overall market still exhibits high volatility and low returns.