Crypto. That’s it.
So you’d like a little more explanation?
To offer the most obvious explanation first. Crypto is in its infancy, mass adoption is coming, and Wall Street acceptance was only at the start of June 2023. With any new tradable product the largest returns are at the beginning. Bitcoin offered 1500%, 5500% and then 1300% annual return in it’s first few years. That has reduced in the proceeding years, however, in the bullrun we will certainly see annual percentage growth in the hundreds of percent.
Crypto is still high risk for the uneducated and if you don't want to study the crypto market, it's safer to put your money in a fund somewhere.
From this chart we can see that compared to any traditional asset class Bitcoin offers far superior annual returns. When making a decision to trade you need to look at the asset's history. This spreadsheet only shows Bitcoin but if we did a comparison between BTC and other cryptocurrencies you would see that some Altcoins have mooned at particular moments offering 10,000x. However, Altcoins should only be 30% of your holding, BTC and ETH should be split 40/30 or 50/20. For the sake of this example we will look at Bitcoin only.
Looking at the BTC row, you can see the 4 year cycle in full effect. You can read about the Crypto Cycle in another of our articles. With 2014/18/22 (the Winter) we saw clear pull backs, however, these were pullbacks from the huge returns in the previous year (Autumn) 2013/17 and in 2021 seeing all-time highs of $69,000. So understanding this allows you to move your money to different markets if you so wish.
The next thing to deliberate is if you trade yourself or if you have a money manager or invest in a hedge fund. These questions are important because you need to understand how much of your trading profits you are leaving on the table.
For example; If you don't want to manage an investment account by yourself an Asset Manager is a very useful tool to provide healthy returns. A hedge fund would offer anything from 5%-14% depending on the market. An asset manager working in the traditional markets would might give you up to 18%. However, if you took your initial investment to BlackRock or one of the other institutions currently applying for a BTC Spot ETF you would see far greater returns than the traditional finance. Once their product offering is released, I would assume you could be offered up to 25% return. This would offer better returns than any traditional asset class and all with the added benefit of not having to manage your account, concern yourself with risk, learn integral market knowledge or sign up to decentralised exchanges with every private piece of information you have. This represents and much better deal than the money managers of old.
Disclaimer - None of what is written on this website is financial advice and only descriptions of how the author trades and for entertainment purposes.
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