The bear market has three treasures, mining, fixed investment, and cold wallets.
There is a saying in the currency circle, the source is not testable, but it has been widely spread: the bear market has three treasures, mining, fixed investment, cold wallet.
What this means is that there are three things that should be done in a bear market: buy a machine to mine, buy a coin, and make a coin, put the coin in a cold wallet. This also reflects the importance of "fixed investment" in the bear market.
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The so-called "fixed investment", that is, a fixed amount of money is purchased every month, and the fixed investment strategy is actually equivalent to gradually increasing the position. The opposite of "fixed investment" is "stud", which means that all funds are used to buy coins from the beginning.
Many currency circles recommend the ordinary investment Xiaobai to vote, but why is the fixed vote suitable for Xiaobai? In an attitude of seeking truth from facts, the Odaily Planet Daily made a small application question. Suppose we have voted or studed in any of the past 18 months. What will happen to the final result? Send a survival guide here.
One: scenario setting
The first point to note is that historical data shows that BTC prices have cyclical fluctuations, not always rising or falling. The discussion on fixed investment and Stud in the following article is based on the cyclical fluctuation of Bitcoin.
(BTC history cycle)
The following two situations are not within the scope of the study: If you think Bitcoin prices will continue to rise in the future, you can directly stud (because the fixed investment cost is higher, the income is lower); if you think Bitcoin is a bubble, think bitcoin price will be in the future It has been falling until it is zero, so you don't need to know about Stud and the cast.
1. Set the scenario period . We set the investment cycle from January 2018 to June 2019. During these 18 months, Bitcoin experienced a small cycle of bull-bearing transformation: from the peak to the bottom, and then back to the top from the bottom.
2. Set the fixed vote and Stud price . Since the bitcoin price is in a state of real-time fluctuations per minute, it is difficult to conduct research. Therefore, we set the price of the fixed vote and Stud as the average of the opening and closing prices per month, thus reducing the error.
For example, the opening price of BTC in January 2018 was $13,249.25, and the closing price was $100,31.54, so the price of the Stud and the fixed investment for the month was $1,1640.4.
Thus, we get a BTC price list from January 2018 to June 2019, as follows:
(BTC price trend within 18 months)
3. Set the settlement date for the fixed vote and Stud . We set the settlement date to the average price of June 2019, which is $9753.
4. Set the fixed investment and the Stud principal (cost) :
- Stud principal – $1.8 million, and all of the money was bought in a month of the 18 months.
- The capital is set to be invested – $100,000 per month.
Here to explain, as time goes by, the fixed investment cost is falling. If the investment is scheduled from January 2018, the principal amount to be invested in June 2019 is US$1.8 million; if the investment is scheduled to start in February 2018, the principal amount to be placed in June 2019 is US$1.7 million, and so on. .
Second, the total amount of money bought: Stud runs and wins
After the previous setting is completed, we have calculated the total number of coins that have been settled or studed in a specific month in the past 18 months, accumulating to today:
(Total investment & total number of Stud purchases)
- The yellow line on the graph indicates the sum of coins purchased from a certain month to June 2019. For example, the point corresponding to November 2018 (171) indicates that the sum of coins purchased from November 2018 to June 2019 is 171.
- The gray line on the graph indicates the total amount of $1.8 million worth of Stud purchases in a given month.
For example, Xiao Ming bought a coin of $1.8 million in Stuttgart in December 2018, and the unit price was $3891, eventually obtaining 462 BTCs.
At the same time, the fixed investment ($100,000) started in the same period, and 25 BTCs were obtained in the same month. In the 7-month fixed-time, the price of 100,000 US dollars was decreasing due to the increase in the price of the currency. In the end, Xiao Ming bought 152 BTCs in 7 months, which is much smaller than the Stud (462) that started in the same period.
Third, the rate of return
Based on the price of Bitcoin, the amount of coins purchased, and the cost, we also calculated the comprehensive rate of return that entered the market in any month in the past 18 months until June of this year, as follows:
(Definite investment & Stud comprehensive rate of return)
- The gray line on the map indicates the comprehensive rate of return from June to June 2019.
- The yellow line on the chart indicates the combined rate of return of $1.8 million in a certain month of Stud.
- Comprehensive rate of return = number of coins * June 20th currency price / cost -1. For example, the gray line value corresponding to July 2018 is 70%, that is, the fixed investment from July 2018, and the comprehensive profit rate for the 12 months to June 2019 is 70%.
Although after June 2018, the total number of coins purchased for a fixed investment is much smaller than the total number of Studs in the same period. However, the above chart shows that before December 2018, the fixed-income comprehensive rate of return is still higher than the comprehensive rate of return of the same period.
It is worth noting that in December 2018, the price of Bitcoin reached the lowest price in the past 18 months, and then the price rebounded, opening the bull market. At the low price point, Stud's comprehensive rate of return is much higher than the fixed rate of return for the same period.
However, it is clear that the risk of fixed investment is lower.
The combined yields of Stud in January and February of 2018 were -16% and -5%, respectively. This indicates that the people at the high point of the Stora at the time have not recovered the cost; in contrast, whenever they vote, the comprehensive The yield has never been negative.
In the bear market, the pre-sales position was small, and the decline was small. When the bull market rebounded, the profit was even higher. In the bull market, the fixed investment cost was higher, so the profit rate dropped.
Fourth, the maximum withdrawal
Since it is an investment, it has to consider volatility. We calculated the maximum retracement of the fixed vote and Stud in the position.
The significance of this indicator is that it can measure the volatility of fixed investment and Stud position assets, as shown in the following figure:
(fixed vote & stud maximum withdrawal)
The so-called maximum retracement, that is, the maximum loss situation when holding the asset. The maximum retracement of fixed investment and Stud reached its peak at the beginning of 2018, with losses of 48% and 69% respectively. When the price of Bitcoin continued to rise after January 2019, both fixed investment and Stud did not show a loss.
For example, the yellow line (fixed investment) in the above figure corresponds to a value of -45% in March 2018, which means that the investment from March 2018 to June 2019 will result in a maximum loss of 45% in the 16-month period; In the same period, the Blue Line (Stud) has a maximum retreat rate of -59%. This also means that in March 2018, the fixed investment is more stable than the stud in the same period, with less losses.
Fixed investment is smaller than the maximum thawing rate of Stud in the same period, which means that its losses are less and assets are more stable.
In addition, we have drawn the cycle of choosing Stud and the fixed investment during the period, and measured how long it would take to close the loss if it was just before the fall.
(Stud & scheduled return to this cycle)
From the above figure, we find that it is assumed that Bitcoin will always rise back like this year. The return period of the fixed investment will be smaller than that of the same period, because the later position is larger, and the gain is enough to cover the loss in the previous small position. Even if you buy at the highest price of BTC (January 2018), it will only take 16 months for the investment to return, but the Stud in the same period has not returned.
Is it better to vote than Stud? There are no high or low points in the two strategies of fixed investment and Stud.
From the perspective of average yield, the average comprehensive rate of return for the 18-month period is 76.28%, and that of Stud is 61.17%. Although the average return rate of fixed investment is higher, the upper limit of the value of Stud's yield (171%) is higher than the upper limit of fixed investment (112%), which means that Stud is actually suitable for high-risk investors to fight.
From the average retracement, the fixed vote is always smaller than the Stud, and the risk is smaller.
In addition, Stud needs to choose the right time. For ordinary users who cannot grasp the timing of admission, they still choose to vote more safely. And Stud is suitable for senior investors who can take on high-risk for a long time.
So how do you make a fixed vote?
The first is to choose the currency, and the preferred bitcoin is the first choice . Many investors tend to misunderstand when they vote, and think that Altcoin is also suitable for fixed investment. Judging from the market performance this year, while Bitcoin returned to the bull market level, the altcoin currency generally did not return to the same level.
Clipper Coin Capital's managing director and Future Money partner Li Zhe told Odaily Planet Daily that it is the most insured for Bitcoin, and it is difficult for the altcoin to usher in a rising market. "Small coins are not solid in fundamentals. Second, the plates are too small, and large funds cannot participate."
Secondly, if you encounter a rising market, you can delay the timing of the investment . Since the media, Mr. Yan Yan said: "For example, if you plan to make a vote on the 15th of each month, assuming that the price has skyrocketed on the day, you can delay the price adjustment according to your judgment for a few days, etc. But don't deviate too much, the recommended delay is not exceeded. 7 days. The advantage of doing this is that you can absorb more chips at a lower cost. Of course, there are some small requirements for your technology, but not high."
Finally, the fixed vote must be done with force . "The fixed investment is not a regular Stud, and the monthly investment should not exceed 30% of the salary. The fixed investment must be done easily and without burden." Xiao Yan said.
Author | Qin Xiaofeng