Bitcoin drawdowns

[Ed48]

I put together this which shows all the drawdowns over the past 10 years.

There have been two over 80%. Investing $10,000 in either Dec 2013 or Dec 2017, and hodling, would have resulted in your account shrinking to about $1,500 before recovering.

The data for 2021 may be premature if there are any further price falls in the next few months.

 

[virtusa]

Isn't drawdown generating negative numbers instead of positive?
You showed drawup instead of drawdown.

 

[blink18]

I put together this which shows all the drawdowns over the past 10 years.

There have been two over 80%. Investing $10,000 in either Dec 2013 or Dec 2017, and hodling, would have resulted in your account shrinking to about $1,500 before recovering.

The data for 2021 may be premature if there are any further price falls in the next few months.

View attachment 273998

I think in 2011 was even bigger maxDD, around -95%.

Size your position accordingly and you won't have any problems with too much risk.

 

[Ed48]

Isn't drawdown generating negative numbers instead of positive?
You showed drawup instead of drawdown.

Yes, I suppose technically the chart should be the other way up.

 

[Ed48]

I think in 2011 was even bigger maxDD, around -95%.

The data source I used only went back to Q4 2011.

https://bitcoincharts.com/charts/bitstampUSD#tgCzm1g200zm2g25zl

 

[blink18]

The data source I used only went back to Q4 2011.

https://bitcoincharts.com/charts/bitstampUSD#tgCzm1g200zm2g25zl

Check this: https://bitcoin.zorinaq.com/price/

 

[Pekelo]

Since institutional money moved in (the last 2 years) its behavior changed, so you can't draw conclusions from past movements.

 

[GlobalMacro90]

Since institutional money moved in (the last 2 years) its behavior changed, so you can't draw conclusions from past movements.

I'm a bitcoin fan and want to believe this to be true .. but I see no evidence for it. People hypothesized that institutional adoption would lead to lower volatility but again empirically this has not been the case.

Sure maybe BTC is less volatile than the very early days (2009-2011) but it's basically the same vol as the last several years. Annualized vol of roughly 80%(!). Plus we had several drawdowns of over 30% this year alone (and one >50%) yet despite all of that BTC is STILL up 100% or so for the year LOL.

Crazy asset.

 

[Pekelo]

I'm a bitcoin fan and want to believe this to be true .. but I see no evidence for it.

Quite simple, put up SPX vs. BTC on the same screen. BTC is basically a high beta tech stock right now and follows the market 90% of the time. This year I only remember one occasion when it didn't go down with the market. It over reacts in both directions. This also means it is NOT a hedge.

 

[virtusa]

LONG TERM performance of BTC. I had no data for earlier period.