Cite This Comparison
"MicroStrategy vs Bitcoin (MSTR vs BTC): Returns, Risk & Volatility (2024)." Gale Finance, December 31, 2024. https://www.gale.finance/compare/mstr-vs-btc-2024 Free to use with attribution. Please link back to this page or gale.finance.
Analysis period: 2024-01-01 to 2024-12-31
Relative Performance of MSTR vs BTC (Normalized to 100)
Normalized to 100 at start date for comparison
Key Takeaways
- Total Return: MSTR delivered a +322.7% total return, while BTC returned +109.7% over the same period. MSTR outperformed on total returns.
- Risk-Adjusted Return (Sharpe Ratio): MSTR had a higher Sharpe (1.81 vs 1.58), indicating better risk-adjusted performance.
- Volatility (Annualized): MSTR was more volatile, with 110.2% annualized volatility, versus 52.8% for BTC.
- Maximum Drawdown: BTC's maximum drawdown was -26.2%, while MSTR experienced a deeper drawdown of -46.4%.
MicroStrategy vs Bitcoin Correlation
MicroStrategy and Bitcoin were weakly correlated in 2024. With a correlation of 0.03, these assets showed meaningful independence, offering diversification benefits when held together.
For portfolio construction, this weak correlation suggests that combining MSTR and BTC could reduce overall portfolio variance. However, correlations can increase during market stress.
| Metric | Metric | Value |
|---|---|---|
| Current (30-day) | 0.07 | |
| Average (full period) | 0.03 | |
| Minimum | -0.35 | |
| Maximum | 0.36 |
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, 2024:
Difference: $21,299.777 (MSTR ahead)
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MicroStrategy and Bitcoin: Risk Analysis
MicroStrategy experienced its maximum drawdown of -46.4% from 2024-03-27 to 2024-05-01. It has not yet recovered to its previous peak.
Bitcoin experienced its maximum drawdown of -26.2% from 2024-03-14 to 2024-09-07. 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 (1.81 vs 1.58), 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 57.3% vs BTC 31.5%. 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 (2024)
| Metric | MSTR | BTC |
|---|---|---|
| Total Return | +322.7% | +109.7% |
| Annualized Volatility | 110.2% | 52.8% |
| Sharpe Ratio | 1.81 | 1.58 |
| Sortino Ratio | 3.49 | 2.65 |
| Max Drawdown | -46.4% | -26.2% |
| 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 110.2% annualized, compared to 52.8% for BTC During 2024. Higher volatility meant larger price swings in both directions.
Did MSTR provide diversification when held with BTC?
MSTR and BTC were weakly correlated in 2024, with an average correlation of 0.03. This weak correlation suggested meaningful diversification benefits when held together.
Which had better risk-adjusted returns: MSTR or BTC?
MSTR showed better risk-adjusted performance with a Sharpe ratio of 1.81 versus BTC's 1.58 During 2024.
Could MSTR and BTC have been combined in a portfolio?
Yes, though allocation sizing mattered. Their weak correlation could have meaningfully reduced overall portfolio variance. MSTR's higher volatility (110.2%) meant even small allocations can materially impact overall portfolio risk.