Tom Lee: "Bitcoin (BTC) Returns Are Decided Within 10 Days of the Year"

▲ Bitcoin (BTC)

An analysis suggests that the long-term returns of Bitcoin (BTC) are effectively determined by just 10 trading days annually. It warns that missing these 10 best-performing days could cause annual returns to plummet to minus 27%.

According to Stockwitz, a U.S. investment media outlet, on July 5 (local time), Tom Lee, a strategist at Fundstrat and chairman of BitMine (BMNR), stated that Bitcoin has recorded the highest average annual compound returns among all asset classes over the past 10-15 years. However, he explained that excluding the 10 best-performing trading days each year results in an annual loss of 27%.

Lee said, “Cryptocurrencies generate most of their returns within 10 days.” He then presented the concentration of returns in a very small number of trading days as the strongest reason why one should not attempt market timing.

A similar trend has been observed in the stock market. According to a Fundstrat survey, missing the best-performing days of the S&P 500 Index (SPX) causes long-term returns to fall into negative territory. Lee stated that the top 10 trading days over the past three years accounted for more than 24 percentage points of the total return.

For long-term cryptocurrency investors, he mentioned the 'early phase' of the 4-year cycle, from August to October, as the optimal buying period. Lee suggested that Bitcoin could remain in the $50,000 to $60,000 range during this period. He explained that cryptocurrency rallies are generally short-lived due to their nature as highly volatile, decentralized assets without fixed earnings reports or specific catalysts.

BitMine maintains a conservative operating stance during the cryptocurrency bear market. It holds approximately $600 million in cash, has staked 80% of its Ethereum (ETH) holdings, and earns over $250 million in annual staking rewards. Lee stated, “We are going through a period where prices are truly disappointing and very frustrating,” adding that they are preparing for the end of the crypto winter.

[Article Summary]

-Tom Lee stated that most of Bitcoin’s returns are concentrated in just 10 trading days annually.

-He analyzed that if the 10 best-performing days each year are excluded, Bitcoin’s annual return drops to minus 27%.

-Lee mentioned August to October as the initial buying period in the 4-year cycle for long-term investors.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*