Bull or bear uncertain? Decode the true value of Gate financial products using the Sharpe Ratio

As of February 12, 2026, the sentiment indicator in the crypto market is pointing to a delicate level. Bitcoin (BTC) is priced at $67,700.9, down 2.14% over the past 24 hours, with a retracement of over 46% from its all-time high of $126,080. Ethereum (ETH) is currently at $1,969.96, approximately 60% below its peak. More notably, the core metric measuring risk-adjusted asset returns—the Sharpe Ratio—has recently fallen to a historic low of -10.

For crypto wealth management, this marks a critical milestone. A negative Sharpe Ratio indicates that continuing to solely accept price volatility for excess returns no longer compensates for the risk of account value drawdowns. This article will review the performance of BTC, ETH, and GT during different bull and bear phases, and, based on actual data from Gate’s financial products, analyze the applicable scenarios for capital-protected and floating-rate wealth management in the current cycle.

The Sharpe Ratio Enters “Deep Water”: History Won’t Repeat Simply, But the Same Rhyme Is Still There

The core logic of the Sharpe Ratio is “how much excess return can be gained per 1% of volatility endured.” When this indicator remains negative and its absolute value increases, the market is usually in one of two states: an extreme panic liquidation phase or a liquidity drought bottoming-out phase.

Currently, BTC’s Sharpe Ratio is about -10, a figure that has only appeared in 2018 and 2022. Reviewing those two cycles: in 2018, BTC fell from $19,000 to $3,200; in 2022, from $69,000 to $15,500. Although this bear market has not yet seen such extreme declines, the duration of negative Sharpe Ratios is lengthening.

Key data anchors (Gate market data as of 2026-02-12):

• BTC: current price $67,700.9, retraced 46.28% from its all-time high, 30-day price change -23.78%
• ETH: current price $1,969.96, retraced 60.18% from its peak, 30-day change -32.22%
• GT: current price $6.9, retraced 73.40% from its high, 30-day change -32.10%

Market facts: When mainstream assets generally retreat 20%–30% within 30 calendar days, floating wealth management products that rely mainly on spot volatility are likely to see their Sharpe Ratios enter negative territory. Conversely, capital-protected wealth management, although its absolute returns narrow as macro interest rates decline, benefits from a denominator—volatility risk—that approaches zero, thus showing a significant advantage in Sharpe Ratio at this stage.

Capital-Protected Wealth Management Revisited: The “Stabilizer” Effect in Years of Low Sharpe Ratios

The core feature of capital-protected products (current, fixed-term, auto-earning coins) is not high returns but zero principal loss risk and guaranteed returns.

Backtest Scenario: Q4 2025 – Q1 2026

During this period, BTC’s price fell below $68,000 from around $80,000, and ETH broke the psychological $2,000 level. If investors held floating yield products (such as leveraged ETFs or quantitative strategies) in November 2025, their net asset values generally retraced 15%–30%. Meanwhile, Gate’s current products (like USDT wealth management and auto-earning coins) maintained positive yields, with annualized returns fluctuating between 3% and 8%.

Sharpe Ratio Backtest Comparison (Nov 2025 – Feb 2026):

• BTC spot holding: return -23.78%, volatility approximately 65% (annualized), Sharpe Ratio -0.36 (cross-cycle backtest)
• Gate’s USDT current wealth management: return about +1.8% (3 months), volatility 1.8

Conclusion: In a market dominated by negative Sharpe Ratios, the risk-return efficiency of capital-protected wealth management far exceeds that of mainstream spot holdings. This is precisely why the “Auto Earn Coins” feature in Gate’s wealth management segment saw increased activity in February 2026: merchants automatically transfer idle funds into low-risk wealth management, earning interest hourly without affecting daily settlements.

Floating Wealth Management Revisited: Only Effective Under Two Conditions

Floating yield products (such as structured products, dual-currency investments, ETF trend strategies) are not ineffective but are highly suitable only during specific cycles.

Backtest Scenario 1: Structural Bull Market 2023–2024

From October 2023 to March 2024, BTC rose from $27,000 to $73,000, with a consistently positive Sharpe Ratio. During this phase, structured products launched by Gate, such as the “Bull Shark Fin,” generally yielded 10%–25% at maturity, with no principal loss cases.

Backtest Scenario 2: Volatile Market in Q2 2025

From April to June 2025, BTC fluctuated narrowly between $80,000 and $95,000. Some floating products (like range accumulation products) achieved annualized returns of 8%–12%, with Sharpe Ratios outperforming current savings products.

Backtest Scenario 3: Unilateral Downtrend in Jan–Feb 2026

At this stage, BTC’s 30-day decline is 23.78%, ETH’s is 32.22%. Any floating products linked to directional exposure show deeply negative Sharpe Ratios. Even GT (Gate’s platform token) experienced a 32.10% retracement, reflecting the transmission of liquidity contraction within the platform ecosystem.

Core conclusion: The Sharpe Ratio of floating wealth management products only has meaningful value when the underlying asset prices are above their 20-day moving averages and volatility is controllable. Currently, market sentiment is at a “neutral” to “bearish” junction, with BTC and ETH failing to recover key resistance levels, making trend-based products still unattractive risk-reward-wise.

Current Strategy: Use the Sharpe Ratio as an Anchor for [Gate Wealth Management] Allocation Focus

Based on the above backtests, the rational wealth management approach in the current stage (February 2026) should follow the principle of “capital preservation first, floating yields second; short-term, low leverage.”

Strategy 1: Core Position — Auto Earn Coins / Current Savings

Applicable assets: USDT, BTC, ETH, GT

Expected Sharpe Ratio: Positive (>0.5)

Gate products: Gate Wealth Management “Current” segment, 【Auto Earn Coins】 feature

Logic: Abandon precise bottom-prediction; hourly interest guarantees offset the floating losses of spot holdings.

Strategy 2: Satellite Position — Short-term ETF Trading Contest (Not for long-term holding)

Applicable scenario: Technical rebound window after extreme oversold conditions

Expected Sharpe Ratio: Neutral to slightly negative, but with favorable odds

Latest Gate activity reference: Gate ETF Peak Trading Contest (ongoing, total prize pool 100,000 USDT)

Note: This strategy is suitable only during 24–72 hours of extreme sentiment recovery; not recommended for monthly allocations. The event’s “First Loss Compensation” and “Daily Blind Box” features can help smooth short-term negative Sharpe experiences.

Strategy 3: Observation Position — GT Ecosystem Wealth Management

Current GT price: $6.9, total circulating market cap $802.8M

Backtest of Sharpe Ratio: Over the past 30 days, GT declined 32.10%, with higher volatility than BTC/ETH

Logic: Platform token wealth management (such as GT current or fixed-term deposits) depends on trading volume revival and market share growth. Currently, Gate’s market share is about 0.032% (based on total market cap), still at a historical low, suitable for small-scale dollar-cost averaging, not for heavy speculation.

Summary: Three Lessons the Sharpe Ratio Teaches Us

• During negative Sharpe cycles, not losing money is the highest Sharpe Ratio. BTC needs to rebound above $80,000, ETH stabilize above $2,400, for the risk-reward profile of floating wealth management to improve systematically.
• The Sharpe Ratio of wealth management products is positively correlated with macro liquidity. The 2026 forecasted average prices are $69,065 for BTC and $2,095.27 for ETH, both significantly below the optimistic scenarios in current price models. This suggests a likely range-bound market throughout the year, extending the window for capital-protected products.
• Gate’s product matrix covers the full cycle of Sharpe Ratio needs. From low-volatility auto-earning coins, to ETF trading contests, to long-term ecosystem deployment, investors can internally rebalance assets without relying on third-party exchanges.