Cite This Comparison
"Bitcoin vs Ethereum (BTC vs ETH): Returns, Risk & Volatility (2025)." Gale Finance, December 31, 2025. https://www.gale.finance/compare/btc-vs-eth-2025 Free to use with attribution. Please link back to this page or gale.finance.
Analysis period: 2025-01-01 to 2025-12-31
Relative Performance of BTC vs ETH (Normalized to 100)
Normalized to 100 at start date for comparison
Key Takeaways
- Total Return: BTC delivered a -5.4% total return, while ETH returned -11.0% over the same period. BTC outperformed on total returns.
- Risk-Adjusted Return (Sharpe Ratio): BTC had a negative Sharpe (-0.03) while ETH was positive (0.16), indicating ETH had meaningfully better risk-adjusted performance in this period.
- Volatility (Annualized): ETH was more volatile, with 75.4% annualized volatility, versus 41.9% for BTC.
- Maximum Drawdown: BTC's maximum drawdown was -32.1%, while ETH experienced a deeper drawdown of -60.1%.
Bitcoin vs Ethereum Correlation
Bitcoin and Ethereum were strongly correlated in 2025. With a correlation of 0.81, these assets tended to move together, limiting diversification benefits.
For portfolio construction, this strong correlation means holding both BTC and ETH provides limited risk reduction — they're likely to decline together in downturns.
| Metric | Metric | Value |
|---|---|---|
| Current (30-day) | 0.90 | |
| Average (full period) | 0.81 | |
| Minimum | 0.44 | |
| Maximum | 0.96 |
Correlation measures how closely two assets move together. Values near +1 indicate strong co-movement, near 0 indicates independence, and negative values indicate inverse movement.
Investment Comparison
If you invested $10,000 in each asset on January 1, 2025:
Difference: $553.919 (BTC ahead)
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Bitcoin and Ethereum: Risk Analysis
Bitcoin experienced its maximum drawdown of -32.1% from 2025-10-07 to 2025-11-23. It has not yet recovered to its previous peak.
Ethereum experienced its maximum drawdown of -60.1% from 2025-01-07 to 2025-04-09. It has not yet recovered to its previous peak.
Smaller drawdowns and faster recoveries indicate lower downside risk and greater resilience during market stress.
Sharpe Ratio of BTC and ETH
Sharpe ratio measures return per unit of risk (volatility). A higher Sharpe indicates better risk-adjusted performance. BTC had a negative Sharpe (-0.03) while ETH was positive (0.16), indicating ETH had meaningfully better risk-adjusted performance in this period.
A Sharpe above 1.0 is generally considered good, above 2.0 is excellent. Negative Sharpe means the asset underperformed the risk-free rate. Calculated on each asset's full 365-day lookback of available prices and annualized using the asset calendar (365 for crypto, 252 trading days for equities/ETFs/metals).
Sortino Ratio of BTC and ETH
Sortino ratio measures return per unit of downside risk. Unlike Sharpe, it only penalizes negative volatility. ETH had better downside-adjusted returns.
A higher Sortino is better. It's particularly useful for assets with asymmetric volatility (big gains, smaller losses). Downside volatility: BTC 29.0% vs ETH 49.3%. Calculated on each asset's full 365-day lookback of available prices and annualized using the asset calendar (365 for crypto, 252 trading days for equities/ETFs/metals).
Full Comparison of Bitcoin vs. Ethereum (2025)
| Metric | BTC | ETH |
|---|---|---|
| Total Return | -5.4% | -11.0% |
| Annualized Volatility | 41.9% | 75.4% |
| Sharpe Ratio | -0.03 | 0.16 |
| Sortino Ratio | -0.04 | 0.25 |
| Max Drawdown | -32.1% | -60.1% |
| Avg Correlation to S&P 500 | N/A | N/A |
Bitcoin vs Ethereum: Frequently Asked Questions
Which had higher volatility: BTC or ETH?
ETH showed higher volatility at 75.4% annualized, compared to 41.9% for BTC During 2025. Higher volatility meant larger price swings in both directions.
Did BTC provide diversification when held with ETH?
BTC and ETH were strongly correlated in 2025, with an average correlation of 0.81. This strong correlation limited diversification benefits.
Which had better risk-adjusted returns: BTC or ETH?
BTC had a negative Sharpe (-0.03) while ETH was positive (0.16) During 2025, indicating ETH had meaningfully better risk-adjusted performance.
Could BTC and ETH have been combined in a portfolio?
Yes, though allocation sizing mattered. Their strong correlation provided limited risk reduction since they tended to move together. ETH's higher volatility (75.4%) meant even small allocations can materially impact overall portfolio risk.