According to a recent analysis by the New York Digital Investment Group (NYDIG), Bitcoin has demonstrated superior returns compared to various asset classes, despite its notable volatility.

The report, published on Oct. 11, was authored by Greg Cipolaro, the global head of research at NYDIG.

Cipolaro utilized the Sharpe ratio, a financial metric that assesses the performance of an asset relative to its risk, to evaluate Bitcoin against equities, bonds, and gold. The Sharpe ratio measures the ratio of excess returns to the volatility of those returns, with higher values indicating better risk-adjusted performance.

While gold slightly outperformed Bitcoin in terms of the Sharpe ratio over the past year, Cipolaro noted that the difference is marginal.

Challenging a claim made by Goldman Sachs on Oct. 7, which suggested that Bitcoin's year-to-date increase of 40% did not sufficiently compensate for its volatility, Cipolaro argued that the returns associated with Bitcoin justify the inherent risks.

He stated that “the risks (price volatility) that Bitcoin investors endure are more than made up for in terms of returns.”

The analysis indicates that Bitcoin ranks favorably across nearly all metrics and time frames when compared to other asset classes. However, Cipolaro emphasized that while Sharpe ratios are useful for comparing risk-adjusted returns, absolute returns are crucial for fulfilling financial obligations.

As of the latest data, Bitcoin has experienced a flat trading pattern, recently retreating from an intraday high of $63,150 to around $62,560.

NYDIG's report concludes, however, that Bitcoin remains the best-performing asset of the year, even following a traditionally weak third quarter.