Bitcoin has 'superior' historical risk adjusted returns compared to gold and the S&P 500, but why should anyone care?

This post is a follow up to a prior piece that took a historical look at what at what it means to be perceived as a safe haven asset, and factors that prevent bitcoin from being classified as such in current form.

A Sharpe ratio is relatively intuitive to understand; it measures an asset's excess return over an assumed risk-free rate, discounted by the volatility (standard deviation of returns) or "risk" of holding the asset. Said another way, Sharpe ratios are useful for standardizing returns above a risk-free rate, given the level of risk taken (with the assumption that the standard deviation of returns equals risk, an idea first introduced by Harry Markowitz' oft-cited Portfolio Selection paper written in 1952, which kick-started what we know today as Modern Portfolio Theory).