The annualized return on Bitcoin in terms of appreciation (CAGR) is about +40% per year.
So unless your loans have higher than 40% APR, you’re better holding both debt and #Bitcoin, probabalistically speaking.
Discussion
Thanks for this. Something about just getting rid of debt though at the same time that’s hard to put a value on, although I agree, simply speaking the math checks out
It can feel good to pay off debts, but the legacy system incentivizes borrowing in several ways. My answer was getting long so I posted an article: https://habla.news/a/naddr1qqxnzd3exvensvp4xg6rgwfhqgsxzsz83jdwztcapd2qulzhspnyjvn6jxcypvrl0w3aahp40j4smfgrqsqqqa288wrqjk
Would you mind linking your source for the CaGR at 40%?
Of course! Last year I wanted to answer the question “when can I retire based on my stack size?” So I developed this interactive notebook.
The +40% CAGR is based on a lookback period of 4 years of price data. The model attempts to fit the erratic price movement to a log scale by finding the line that captures the middle 80% of data points.
All the math is explained and/or linked to in the notebook:
Thanks for putting this all together. Really good stuff.