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 Bitcoin's risk-free rate. The 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?
Bitcoin itself has no returns: 1 Bitcoin is worth 1 Bitcoin, always. Presumably you actually want to discuss the returns of a Bitcoin plus ordinary currency pair, such as BTC/USD. In that case you'd would treat it the same as you would treat any other asset trading against USD and use some presumed near zero risk bond rate, like US treasuries, in your analysis.