Looking Sharpe

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Eric Turner - February 21, 2019

We’re big on adding context to crypto, which is why we have nearly 80 metrics you can measure, track and sort for each of the 450+ tokens on OnChainFx.

We’re particularly interested in adding metrics that help us transition from the “when moon?” phase of investing to one that’s more mature and sustainable (fundamentals!)

One of those metrics is risk-adjusted return.

Unlike pure return measures (e.g. vanilla ROI), risk-adjusted returns try to get people apples to apples comparisons of performance. Apple is a less risky investment than a seed stage start-up, so even if a given startup returned 30% vs. 10% for Apple, the latter is the better pick. For the non-initiated this is Finance 101 stuff…measuring your “cost of capital” is all about measuring the relative risk you’re taking.

In crypto, in other words, if you’re actively managing assets, you had better be outperforming a traditional index fund or it’s simply not worth HODLing through the volatility?