Notes From A Bitcoin Whale - Part 7

We occasionally get enquiries from potential investors who are eager to invest in Bitcoin Mining, but want to wait and see what the Bitcoin price does before they do. It always reminds me of overhearing a professional couple in a restaurant looking to buy their first home together in the Royal Borough of Kensington & Chelsea, with the male convincing his partner to wait until prices go down; I felt like walking over to their table and saying "trust me, prices never go down in Kensington & Chelsea", but of course, in their eyes, I would have had no credibility.


Just as I assume the couple I refer to above never ended up buying, investors with the above objection never invest in Bitcoin Mining either. Simple maths suggest that they are wrong to do so,


We offer a 1.5% daily return on investment, and provided no withdawals are made, this interest compounds every day. So let's say the current Bitcoin price is $10,000 and you invest 1 Bitcoin with us, After 1 week, your Bitcoin holding would be 1.1098, and, if the Bitcoin price stays the same, the corresponding value of your portfolio would be $11,098.


For the investor to have lost any money (on paper) in this first week, the Bitcoin price would have had to drop to $9,010.63, i.e. a drop of 9.89%. That's a big drop!


After a month; the situation is far more extreme. After a calendar month, your Bitcoin holding would be 1.5631, and, If the Bitcoin price stays the same for the entire month, the corresponding value of your portfolio would be $15,631.


For the investor to have lost any money (on paper) in the calendar month, the Bitcoin price would have had to drop to $6,397.54, ie a drop of 36.02%. That's over a third of its value, and is simply not going to happen.


Of course, none of the above remarks address the opposite scenario, namely that the price of Bitcoin rises after investment.



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