Bitcoin’s profitability outperforms any traditional asset without the need for leverage

The return on investment in Bitcoin is better than that of major traditional assets in the market. This comes from a report by analyst firm Ecoinometrics, which compared the profitability of Bitcoin to that of major traditional assets in a scenario where the investor tries to double your investment on each asset in a year.

According to the company’s study, in order for the annual profitability of traditional assets to reach 100%, Investors have to use their positions many times, while in Bitcoin the number of leverage is lower and in certain cases is not even required.

Examining a number of traditional stocks and indices whose annual return is known Ecoinometrics created the following chart that shows the leverage needed to double the investment.

Bitcoin’s profitability outperforms any traditional asset without the need for leverage
Bitcoin’s profitability outperforms any traditional asset without the need for leverage

Traditional asset leverage required to achieve 100% annual profitability. Fountain: Ecoinometrics.

Ecoinometrics distributes assets by increasing leverage. For example, Nasdaq needs 5x, real estate mutual funds 10x, while high yield corporate bonds have nearly 20x leverage.

The asset with the lowest return is gold, which obviously requires more leverage, the study says. This will appear in the lower right corner of the diagram

“Gold hasn’t done so well in the last 10 years. To double your investment, you need an absurd 66x leverage,” says Ecoinometrics.

Bitcoin, meanwhile, appears first on the list, but to the left of the scale. Ecoinometrics notes that with a return of 230% per year, Bitcoin does not require leverage.

“”Bitcoin is a kind of asymmetrical bet. The advantage is so great that you don’t need leverage to get high returns. As a side effect, this means less risk in your portfolio. In contrast, the other assets mentioned require that you play with leverage in order to get the same absolute return as an unbalanced bet“says the company.

Bitcoin price

On Monday the 26th Bitcoin’s price has been able to regain some of its value by staying above $ 53,000 after recently falling below $ 49,000.

For analyst William Clemente, greed and surge have been eliminated with the recent fall in BTC prices, favoring a new high.

In addition to the liquidations, this can be illustrated using the types of financing. Financing rates are used to link the perpetual swap contract to the spot price of Bitcoin. When most traders are long, it pays to be short and vice versa. During the event, funding rates turned negative, meaning it was profitable for traders to take on the long side of the trade. This has proven to be a buy signal on the last two opportunities that have arisen during this bull market. “????

The Exit Earning Spent Ratio (SOPR) is also approaching a “full reset,” a previously established metric Cointelegraph that tends to dictate local market funds.

“”The SOPR is currently nearing the hard reset mark, which means the price has bottomed or is very close to the current correction.“added Clemente.

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