During Bitcoin’s 10-Year Life Cycle, BTC has Remained Profitable 94% of Its Time, Under 200 Days Not Green
Investing in any asset class comes with its own risk and requires to be adversely studied before making any investment. Bitcoin has grown to become one of the lucrative forms of investments in the last decade, and in the last couple of years, even institutional investors have used it as an important investment diversification asset.
Recent data from LookIntoBitcoins suggested that Bitcoin has remained profitable for more than 94% of its 10-year lifecycle. The data tracked the Bitcoin's value till Nov 07, 2019 for 3,368 days, out which Bitcoin has remained in green for 3,170 days, and only 198 days in red.
The calculation was done by looking at the price of Bitcoin and compare it with its current value of $9,200. Thus, if an investor bought Bitcoin on 94% of the days in the past 10 years and held it till today, they would make a profit on their investment.
The data also highlighted that if an investor bought Bitcoin in its first seven years of existence, it would have made a significant profit. But those who bought Bitcoin after December 2017, throughout 2018 and 2019, their profit or loss would vary as per the change in price trend in the past 2 years.
Do these Numbers Project a Fairytale Picture?
Although the generalized data suggest that Bitcoin has remained profitable for 94% of its life cycle, it should be taken with a pinch of salt as it does not project whether traders were able to capitalize on the trend projected by the data.
The data in no way a projection that Bitcoin is low risk or highly profitable form of investment. The major factor that should be taken into consideration is the price volatility, as in 2019 itself when there have been several reports claiming that Bitcoin price volatility has decreased significant saw Bitcoin rise by more than 40% in a single day and even fall by double digits in a matter of hours.
Another thing to note here is that Bitcoin gained popularity and drew attention during the massive bull run in 2017, and many traders bet big money on Bitcoin as they expected the price to peak higher. However, Bitcoin fell dramatically throughout 2018, losing more than 80% of its market cap that year itself.
A unique Bitcoin wallet tracking tool from IntoTheBlock tracks the flow of Bitcoin in different wallets which can give us a clear picture of what proportion of BTC holders are in profit. The tool tracked 28 million Bitcoin addresses and assessed their trading history and revealed that a total of 20.4 million addresses made a profit while 5.5 million incurred losses. Thus this data suggest 73.1% of the Bitcoin addresses were in profit to date while only 19.8% have incurred losses.