In previous articles, we mentioned that holding Bitcoin for a full 4 years at any time will not result in a loss.
The chart below shows Bitcoin's CAGR (Compound Annual Growth Rate), where the green line represents the 4-year CAGR, indicating the average annualized return over a 4-year holding period.
The green line has always been greater than 0, meaning that buying and holding for 4 years at any time results in a profit.
Why does this phenomenon occur? With so many assets in the world, why can only Bitcoin guarantee capital preservation every four years?
The reason lies in the fact that Bitcoin is different from other financial assets; it is driven by mathematics and algorithms. To mimic gold, Bitcoin has artificially created a scarcity, meaning that every four years, the production of coins will be halved.
It is precisely because of the halving event every 4 years that has led to Bitcoin's 4-year bull and bear cycle, with each time being a 3-year rise followed by a 1-year decline.
Every 4 years, the principle of capital preservation has further verified the accuracy of the 4-year cycle theory. The price of Bitcoin repeats the trend of the previous cycle in each bull and bear market, maintaining consistency in the general trend, which is why it guarantees capital preservation every 4 years.
This is like the gears of a clock; each part must fit perfectly to ensure that the system continues to operate. The peaks of each Bitcoin bull market and bear market are spaced 4 years apart, and this coincidence in dates is the ultimate embodiment of this theory.
From 2010 to 2021, in these 11 years, buying at any position and holding for 4 years would yield profits, which can be said to have created a miracle in financial history.
I know some people will say that history does not represent the future; just because history was like this does not mean the future will continue in the same way.
But what I want to say is that when a thing continuously repeats and cycles with a distinct pattern, there must be a reason for it, even if you have not yet understood the underlying principles and mechanisms.
This is like our ancestors, knowing that there is a sunrise and sunset every day, and there are four seasons every year. But due to the production level at the time, they did not know why this was the case. Later, everyone learned that the reason is the Earth's rotation and revolution.
Bitcoin is the same; it has similar patterns, but people have not yet understood the underlying mechanisms. So when you see this, you will understand that Bitcoin is not a financial asset, but a physical phenomenon.
Do not analyze from a financial perspective, but from a physical perspective; many things you cannot understand may become clear.
The current bull market in the cryptocurrency space has ended; liquidate Bitcoin.
Bitcoin price when published: $89000
