<p>Instead of looking at bitcoin like a currency, I think you should look at it like a regular stock. The "return" is the return of <em>your fiat money (USD)</em> that's investing in Bitcoin... so the risk free rate should be the risk free rate of your money, i.e. T-bill, etc.</p>

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2019-09-12T00:03:05.030Z
2019-09-12T00:03:05.030Z
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<p>For a conference I need to show the Sharpe ratio's of bitcoin portfolios using different trading strategies. To calculate the Sharpe ratio, I need the Bitcoin's risk-free rate. Risk-free rate for normal stock markets is usually taken from Treasury documents. But cryptocurrencies have no central government and are not affiliated to any country. So how to determine the risk-free rate for, for example, Bitcoin? Is it simply 0?</p>

<econometrics><interest-rate>
How to calculate the risk-free rate of cryptocurrencies?
CoderApprentice
# How to calculate the risk-free rate of cryptocurrencies?

(Asked by: username_0 on 2019-09-11)

For a conference I need to show the Sharpe ratio's of bitcoin portfolios using different trading strategies. To calculate the Sharpe ratio, I need the Bitcoin's risk-free rate. Risk-free rate for normal stock markets is usually taken from Treasury documents. But cryptocurrencies have no central government and are not affiliated to any country. So how to determine the risk-free rate for, for example, Bitcoin? Is it simply 0?

**Tags:** econometrics, interest-rate

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## 1 answers

### Answer by username_1 on 2019-09-12. Score: 3

Instead of looking at bitcoin like a currency, I think you should look at it like a regular stock. The "return" is the return of *your fiat money (USD)* that's investing in Bitcoin... so the risk free rate should be the risk free rate of your money, i.e. T-bill, etc.


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