Regarding the tragic loss caused by the price drop of Bitcoin last week, most people may have a sober idea, that is, they could have bought Bitcoin at a price of $13 in 2013, but still faced a loss, and this is The importance of the “Top Ten Days Rule,” which states that “in addition to the top ten days in each year, Bitcoin has still fallen by 25% every year since 2013”.
Over the weekend, Fundstrats Thomas Lee reminded us of the Rule of the Ten Best Days, as he tried to calm anyone who might be panic-trading. Lee described the rule as the Fundstrat Rule, explaining, Top 10 Best Days, Bitcoin Its going down 25% a year, all the gains are coming in 10 days, and are you good at trading?
But when looking at this statistic by excluding these ten best days, the overall price of Bitcoin has seen some serious losses. For example, in 2017, while the price of Bitcoin rose by 232%, it also experienced a 140% drop.Tom Lee drew some parallels in 2013 and 2014, when the price of Bitcoin fell by 199% and 133%, respectively. Taking all of this into account, Thomas Lee said that since 2013, if you exclude the ten best trading days, the average annual growth rate of Bitcoin is -25%.
Of course, that doesn’t mean we don’t have to worry if we buy Bitcoin on a “Top Ten Day,” the fact that Bitcoin fluctuates wildly every year.In the bull market of 2017, in the other 355 days, the return was 232%, but on the other hand, the past ten best days brought a return of 1136%.
Overall, trading periods outside of those top 10 days have resulted in huge annual losses, and for seasoned traders, picking the right trading day may seem like a near-impossible task.
D-TAP Capital investor and founder Dan Tapiero has a different view on what the rules mean. That is, an investor could have bought Bitcoin at $13 in January 2013 and still lose money.
If investors miss the best ten days of performance each year, which is unlikely to happen, the asset will lose most of its value. If you buy multiple BTCs at a price of $13 and trade them repeatedly, you will also suffer a considerable loss. But even with just one bitcoin, youd still miss out on about $8,000 in returns.
According to Thomas Lee, if someone does not HODL his portfolio during the first ten days of the year, his portfolio loses an average of 25% of his investment.This is very similar to the SP 500, where an investor or trader would lose an average of 5.4% on their portfolio if they did not hold their stock portfolio throughout the ten best trading days 9.2%, which is one of the main reasons why its all about hodling.
The conclusion seems to be that holding Bitcoin seems safer than trading it as the strategy develops. Of course, this has nothing to do with the price on a daily basis, because even during a bull market, we may see huge losses for several days.
Reference The original text comes from bitcoinist and coinspeaker, compiled by the Bluemountain Labs team, the English copyright belongs to the original author, please contact the compiler for Chinese reprint.
