It’s the 6th day of the additional position day. After a 4-day rebound, BTC (Bitcoin) was blocked at the 30-day moving average of 64.6k, and both long and short sides are temporarily deadlocked here.
The previous “Fully Loaded! – Ten-year Covenant # 22 (ROI 48%)” on May 1st quickly received returns on the “fully loaded” at 57.8k. This is the 23rd record and the 15th operation, with a transaction price of $64,404 for additional positions.
After the investment, the ROI (return on investment) has recovered to 60%. The cumulative holding is 7.83 million satoshis. The average holding cost has increased to $40,000.
In the blink of an eye, the “Eight Characters Strategy-Ten-year Covenant” empirical plan has been executed for nearly a year. In one year, the long side has gone from less than $30,000 to over $60,000.
It is better to use the remaining courage to pursue the poor enemy than to sell one’s reputation as a scholar.
By June, the support line of the logarithmic corridor has risen to nearly $30,000. The holding cost line of the Ten-year Covenant is $40,000. This line is difficult to break. If it is broken, it will only be a rare opportunity to add positions.
Interestingly, if we add up and average the investment prices in the first table, it is $41,657. This number represents the holding cost of dollar-cost averaging (DCA). Under the Eight Characters Strategy, the holding cost is $40,321, slightly lower than the cost of dollar-cost averaging.
This fact indicates that Liu Jiaolian’s “Eight Characters Strategy,” at least in the real market conditions over the past year, slightly outperforms dollar-cost averaging. For those who have conducted backtesting, they know how difficult it is to outperform dollar-cost averaging. For those who haven’t, they can refer to Liu Jiaolian’s article “How Difficult Is It to Outperform Dollar-Cost Averaging?” on March 24, 2023.
From the actual operation records, perhaps the strategy of flexible additional positions can be further optimized. For example, in the top of a rapid rising market, if it is judged that the trend may continue for a long time and the increase may be high, it may be better to follow slightly. However, of course, this will also bring greater uncertainty.
Is a 60% return in one year a lot? It doesn’t seem too much, especially for cryptocurrency speculators who are embarrassed to mention it without a 5x or 10x return.
However, what Liu Jiaolian wants to verify is certainty, winning rate, long-term repeatability (stable compounding), as well as the horizontal (everyone) and vertical (scale) replicability.
For the trading volume of BTC, which is nearly $20 billion per day, this strategy can be magnified to $100 million without distortion. In other words, it is feasible to use a fund size of $100 million to make $60 million in one year with the same operation.
If stable compounding can be achieved for 10 years, the total investment in 10 years is $1 billion. After the 11th year, when the Ten-year Covenant plan ends, the total return is 1.6^10 + 1.6^9 + 1.6^8 + 1.6^7 + … + 1.6 = 1.6 x (1 – 1.6^10)/(1 – 1.6) = approximately $29 billion. Let’s call it approximately $30 billion, so the profit is about 30 times the total investment.
Of course, if the investable capital is not accumulated slowly over 10 years but is available now, with a full position, the return rate will be much higher, about 1.6^10 = 109 times, a hundredfold in 10 years.
It is not sensible to have unrealistic expectations for such a high return rate to be stable and compounding in the long term. Remember: if it is destined, it will come; if it is not destined, do not force it.
It should be noted that the long-term productivity growth rate in human society is only 2% per year, and to outperform the inflation of fiat currency, a growth rate of 10% per year is sufficient.
“The greatest disaster is not being content, and the greatest fault is the desire for more. Knowing when to be satisfied is always satisfying.”
The greatest calamity is not being content, and the greatest fault is the desire for more. Those who know when to be satisfied will always be satisfied.
Therefore, being content is fundamental.
(Official account: Liu Jiaolian. Knowledge Planet: Reply “Planet” to the official account)
(Disclaimer: The content of this article does not constitute any investment advice. Cryptocurrencies are highly risky assets with the risk of going to zero at any time. Please participate with caution and take responsibility for yourself.)
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Original link: https://www.bitpush.news/articles/6675443
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