Grayscale: Bitcoin's Gains Concentrated in a Few Trading Days, Opportunity Cost in Exiting

Grayscale's research director Zach Pandl stated that Bitcoin's cumulative return over the past three years is approximately 225%, while the Nasdaq index's return is 109%. The rise of Bitcoin has not been uniform, with a few strong trading days contributing significantly to long-term returns, making it more difficult for investors to time their entry. Data shows that if the five best trading days for Bitcoin are excluded, its three-year cumulative return drops to 95%; excluding the best ten trading days reduces the return to 27%; and if the best fifteen trading days are missed, the three-year return turns into a loss of 11%. In contrast, the return distribution for the Nasdaq is more balanced, with the cumulative return dropping from 109% to 21% after excluding the best fifteen trading days. Grayscale points out that less than 0.5% of trading days contribute enough gains to halve Bitcoin's cumulative return when excluded. For high-return and high-volatility assets, staying out also carries an opportunity cost, as the best trading days are hard to predict, and by the time volatility decreases or market prospects become clearer, some price re-evaluations may have already occurred.

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