Replying to Avatar Dr. Bitcoin, MD

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.
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The Fishcake (nostr.build) 1y ago

Did you mean $1M for 22% APR? 🤔

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The Fishcake (nostr.build) 1y ago

Never mind, I misread the note

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Dr. Bitcoin, MD 1y ago

Bitcoin hasn’t even been bid up to $100k yet, so it was a nice round number to choose. So when you buy bitcoin at $100k, you’re buying a volatile asset with average annual rate of return of 22%…but with volatility, exact future price is tricky to guesstimate. Power law model estimates 95% of time price will be within ½ to 4x model price.

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The Fishcake (nostr.build) 1y ago

I understood that once I read it one more time 😂🫂

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Dr. Bitcoin, MD 1y ago

I made a calculation

Error. 22 should be 26%