Four Year Annualized Returns for BTC

Hi All,

I read a comment earlier today in the BTCMarkets Daily Discussion which stirred my curiosity. imissusenet noted that the LOWEST 4 year annualized return on record for Bitcoin has been 24.2%. They noted that on 6/26/19 BTC closed at $13,016. If this trend were to stay intact, then the price on 6/26/23 will have to be above $31,393.85.

I thought this was fascinating. I dug into a few more historical comparisons, and future projections, that I wanted to get everyone’s input on.

1. I confirmed the 24.2% lowest 4 year annualized return. 12/16/17 price of $19.65K, four years later, the price on 12/16/21 was $46.2K

2. Since November of 2015 (earliest data I could import from Google Finance), the highest 4 year annualized return was from 3/18/17 to 3/18/21, where the price increased from $970 to $57,645, for an annualized return of 177.6% during this time period

3. The average annualized return for a four year period from 11/2015 through 6/2023 was 81%. However, I view this as skewed due to the early nature of BTC, and would not realistic to achieve moving forward

4. The average from 10/23/17 to 6/20/23 was 43% annualized, which seems more reasonable. This date was chosen arbitrarily from when I first started investing.

The last peak price occurred in 11/2021. If we were to replicate a four year annualized yield off that peak price, and the peak were to fall exactly 4 years later, in November of 2025, here is what the peak price would be based on various annualized returns.
15% Annualized Return : $114K
24.2% Annualized Return: $155K
35% Annualized Return: $217K
43% Annualized Return: $273K
50% Annualized Return: $330K
60% Annualized Return: $428K
81% Annualized Return: $704K
177.6% Annualized Return: $3.8M

Even discounting the yet-to-be-broken 24% four year annualized return down to 15%, we would still get over $100K during the upcoming cycle based on the prior peak.

In terms of where we stand currently ~$30K, we are ~315 days away from the halving in May 2024. The price 315 days before the 5/11/2020 halving, on 7/09/19, was $10,578, and 315 days later, was at $10,578. Being range-bound from now up until the May 2024 halving is not out of the realm of possibilities, and even being down through then is likely. Volatility can increase as well, as during the 315 day period last halving, the price dropped into the $3K range during March 2020.

However, I did one last set of comparisons on a four year annualized basis. At every point over the last six years, you earned more money, 2x or more, if you held BTC for 4+ years, compared to the S&P 500. I have charts to share, but having trouble posting.

Since my post addressed potential peaks given various annualized return %’s, I wanted to opine that while an average annualized return over the ENTIRE four years >40% is unlikely, I do believe we will likely see a peak that is more like 2017 in nature, of a blow-off top nature. So on certain days during the cycle, I can imagine four year annualized yields easily breaching > 100% when looking back four years ago to the date. Root’s HODL Model clearly shows an increase in illiquidity of BTC accelerating over time, and combined with the decrease in supply due to the halving, institutional adoption, and potential interest rate cuts, I believe all will lead to a remarkable rise in price as we see supply shock + increased demand.

Using the 4 year annualized return, we can expect at minimum $100K BTC, and likely $150K+. Please feel free to chime in if you believe my assumptions are wrong, or if we can update variables such as doing a 2, 3, or 5 year time period instead of a 4 year time period. Any and all input is welcome! Thanks for taking the time to read.