Ok people, get you cristal ball. I am building a sensitivity model on different things that affect how much wealth can I build over the next 10 years or so. One of the factors I need to populate my model with is the "r" or yearly rate of return of bitcoin in 5 cases, from "catastrophic" to "God came to dinner" or if you prefer "1 = very bad to 5 - Very good".
I am aware that this is not a question that has just an answer, but I would like to ask the community, what range would you say is reasonable for this purpose. e.g. from case 1: -10% anual return to 5: 50% anual return (just as example, not what I am using now).
What range would you use and why?
Yeah I could define that 5 r diegesis for your model. consider every number as yearly return, so lets see it by using veridical historic follow-up.
1. Catastrophic (-70 %) - cast back 2018 (-73 %) and 2022 (-64 %) bear years.
2. Bear (-30 %) - concede a big dip without full capitulation.
3. Base (50 %) - aligns with multi-year average returns around 50-110% over typical 5year window.
4. Bull (100 %) - humble upwards momentum without mania.
5. Superbull (300-400 %) - reflect parabolic years like +1369 % in 2017 or +5400 % in 2013.
if you averaged bitcoin every twelve months volatility you will find 60-80%, so no one can deny downside moves like -30%, but who cares if you hodl from early days? Now look at Median DCA models, since 2019 your weekly or monthly buys produce more than 50 % annually. So those bear year is fully stomached by big bull run which yield 100% + p.a