S&P 500 average annual rate of return for the past 15 years is 13.8%. Which is pretty good. If we assume same ARR for the next 16 years and we assume power law model of #bitcoin price is going to be spot on 16 years from today, buying bitcoin at any price less than $525,000 would yield an ARR of at least 13.8%. At $100,000 per bitcoin, this would imply an ARR of 22.6%
But we will only know the future once it has become the past.
Did you mean $1M for 22% APR? š¤
Never mind, I misread the note
Bitcoin hasnāt even been bid up to $100k yet, so it was a nice round number to choose. So when you buy bitcoin at $100k, youāre buying a volatile asset with average annual rate of return of 22%ā¦but with volatility, exact future price is tricky to guesstimate. Power law model estimates 95% of time price will be within Ā½ to 4x model price.
So then, you are telling me the ārealā inflation rate has been 13.8% over that time span. Got it.
