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Author Topic: The Bitcoin price has to go up for it to be a good investment.  (Read 112 times)
Kprawn (OP)
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January 19, 2018, 09:40:33 PM
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Ok, 2017 was an extraordinary year.... but besides that, Bitcoin should have good years for it to be a better investment than

some other investments. Say you invested in some other financial instrument and you get 10% per year, then you would

gain on Bitcoin's profits over time, if the Bitcoiner did not cash out at some stage.

Other investment : Example : Year 1 - $100 000 invested at 10% interest = $10 000 / Year 2 @ 10% = $110 000 + $11 000..

= $121,000 .... and so on, and so on......

Bitcoin investment has to equal or better 10% or whatever interest you could have received and then again 10% for year 2

and 10% for year 3 ....IF you hoarded and never sold...... At some point these 10% accumulated will be a better investment,

if Bitcoin's price does not keep climbing.

It is very late here and I am tired.... so this might not make sense at all.... and I know the Bitcoin price increased with over

800% last year, but if you did not sell....you would have to hope that it would go far beyond your interest that you might

have received from other investments.  Huh

Anyone care to do the math? Man A - Hoard for 5 years & Man B gets compound interest of 10% per year for 5 years on say

$100 000. {re-investing interest}  Roll Eyes

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January 19, 2018, 10:50:06 PM
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Anyone care to do the math? Man A - Hoard for 5 years & Man B gets compound interest of 10% per year for 5 years on say

$100 000. {re-investing interest}  Roll Eyes
are you asking for a simple yearly compounding interest?  then it would be: 100,000 * (1+0.1)^5
monthly compounding interest with 10%/year: 100,000 * ( 1 + (0.1/12) ) ^ (5*12)

Man A: hoarded for 5 years
example: bought in 2017 at $1000/BTC , sold in 2022 at $11,000 (today's rate stagnant until 2022 Tongue)
the gain on BTC investment would be 11000/1000 = 11x ~ 1000% increase

Man B: chose fixed rate investment 10%/year for 5 years
if compounded yearly, the gain on investment would be 1.15 = 1.61x ~ 61% increase
if compounded monthly for 5 years: 1.008360 = 1.64x (slightly higher)

actually a simple comparison can give you an estimate profit
as you said bitcoin 800% gain in a year then stagnant, and 10%/year rate investment
800% vs 50%.... that's it!

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January 20, 2018, 02:52:50 PM
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I actually wanted to compare the different kinds of investments and strategies for the best return.

A : $100 000 investment with compound interest of 10% over 5 years.

B : $100 000 investment in Bitcoin for 5 years. {Where the investor only hoarded their bitcoins for 5 years}

We can add another option C, where the Bitcoin investor sell at the highest price and do not re-invested the profit.

{buy low /sell high}

The point I am trying to make is, that it is not advisable just to hoard for 5 years, but rather to buy low and sell high during

this period, because you will make more profits and reduce the risk. {You never know where it will end in the last year, so

rather take profits in the years in between.}  Wink

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