A recently published 10-year simulation by Bitcoin researcher Sminston With suggests that investors may be overestimating the importance of perfect entry timing when buying bitcoin.
The model tested the outcomes for a hypothetical $100,000 investment at three entry points: buying at $94,000, 20% lower, or 20% higher.
It assumed an annual withdrawal of 10% and examined exit scenarios 10 years later at median, +20%, or -20% of the projected price based on the median Bitcoin Power Law trend.
Model findings stress long-term growth
Regardless of entry or exit timing, the model showed investors would see substantial profits over a decade.
Even those buying 20% above $94,000 and selling 20% below the median projection would achieve a 300% return on the remaining holdings, with total savings reaching 7.7 times the original investment.
Investors buying at $94,000 saw potential outcomes between $924,000 and $1.18 million, while those buying 20% below could end with $1.15 million to $1.47 million.
The researcher emphasized:
“Don’t stress too much about the entry point. Let time do the heavy lifting.”
Global liquidity and valuation gap
Current macroeconomic conditions further support the model’s optimism.
Global liquidity now stands at $113 trillion, about $7 trillion higher than during the last period when Bitcoin traded near current levels.
Analysts tracking the liquidity gap note that bitcoin is trading at –1.52 standard deviations below its fair value relative to liquidity, a rare reading in bull markets.
Takeaway for long-term holders
The study and macro analysis both indicate that, while timing can boost returns, bitcoin’s long-term trajectory and global liquidity trends are the dominant factors for investors.
