Cite This Comparison
"MicroStrategy vs Bitcoin (MSTR vs BTC): Returns, Risk & Volatility (2023)." Gale Finance, December 31, 2023. https://www.gale.finance/compare/mstr-vs-btc-2023 Free to use with attribution. Please link back to this page or gale.finance.
Analysis period: 2023-01-01 to 2023-12-31
Relative Performance of MSTR vs BTC (Normalized to 100)
Normalized to 100 at start date for comparison
Key Takeaways
- Total Return: MSTR delivered a +335.5% total return, while BTC returned +155.4% over the same period. MSTR outperformed on total returns.
- Risk-Adjusted Return (Sharpe Ratio): MSTR had a higher Sharpe (2.34 vs 2.28), indicating better risk-adjusted performance.
- Volatility (Annualized): MSTR was more volatile, with 73.1% annualized volatility, versus 44.0% for BTC.
- Maximum Drawdown: BTC's maximum drawdown was -20.1%, while MSTR experienced a deeper drawdown of -35.7%.
MicroStrategy vs Bitcoin Correlation
MicroStrategy and Bitcoin were strongly correlated in 2023. With a correlation of 0.73, these assets tended to move together, limiting diversification benefits.
For portfolio construction, this strong correlation means holding both MSTR and BTC provides limited risk reduction — they're likely to decline together in downturns.
| Metric | Metric | Value |
|---|---|---|
| Current (30-day) | 0.72 | |
| Average (full period) | 0.73 | |
| Minimum | 0.50 | |
| Maximum | 0.88 |
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, 2023:
Difference: $18,013.815 (MSTR ahead)
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MicroStrategy and Bitcoin: Risk Analysis
MicroStrategy experienced its maximum drawdown of -35.7% from 2023-02-15 to 2023-03-10. It has not yet recovered to its previous peak.
Bitcoin experienced its maximum drawdown of -20.1% from 2023-07-13 to 2023-09-11. 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 MSTR and BTC
Sharpe ratio measures return per unit of risk (volatility). A higher Sharpe indicates better risk-adjusted performance. MSTR had a higher Sharpe (2.34 vs 2.28), indicating better risk-adjusted performance.
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 MSTR and BTC
Sortino ratio measures return per unit of downside risk. Unlike Sharpe, it only penalizes negative volatility. MSTR 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: MSTR 39.8% vs BTC 26.1%. 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 MicroStrategy vs. Bitcoin (2023)
| Metric | MSTR | BTC |
|---|---|---|
| Total Return | +335.5% | +155.4% |
| Annualized Volatility | 73.1% | 44.0% |
| Sharpe Ratio | 2.34 | 2.28 |
| Sortino Ratio | 4.30 | 3.85 |
| Max Drawdown | -35.7% | -20.1% |
| Avg Correlation to S&P 500 | N/A | N/A |
MicroStrategy vs Bitcoin: Frequently Asked Questions
Which had higher volatility: MSTR or BTC?
MSTR showed higher volatility at 73.1% annualized, compared to 44.0% for BTC During 2023. Higher volatility meant larger price swings in both directions.
Did MSTR provide diversification when held with BTC?
MSTR and BTC were strongly correlated in 2023, with an average correlation of 0.73. This strong correlation limited diversification benefits.
Which had better risk-adjusted returns: MSTR or BTC?
MSTR showed better risk-adjusted performance with a Sharpe ratio of 2.34 versus BTC's 2.28 During 2023.
Could MSTR and BTC have been combined in a portfolio?
Yes, though allocation sizing mattered. Their strong correlation provided limited risk reduction since they tended to move together. MSTR's higher volatility (73.1%) meant even small allocations can materially impact overall portfolio risk.