Bitcoin has been profitable in 94% of its history?

These days an infographic is circulating online showing how Bitcoin would have remained profitable for 94% of its history.

Starting from 2010, the year in which BTC exchanges began, it would have been unprofitable only during the 2021 bubble.

The misconception about Bitcoin profit

Actually, what this chart shows is only the period in which the price of BTC has historically been lower than the current one (green line), compared to the period in which the price has been higher (magenta line).

In other words, it shows that until today the price of Bitcoin has been below $43,000 for 94% of the time since it has been traded on the markets, while only for 6% of the time it has had a higher price.

This does not mean at all that it has remained profitable in 94% of the days since it was listed on exchanges, but only that the current price is higher than the price it had in 94% of the past days.

Claiming that Bitcoin has been profitable for 94% of the time is false, because only those who bought at a price lower than $43,000 and have never sold are currently still in profit. Those who have sold may have done so at a loss, and currently may not be in profit anymore.

The holding

This infographic makes sense especially for holders, i.e. those who, after purchasing BTC, keep it in their portfolio as a store of value without selling it.

In fact, from this point of view, those who have bought BTC and have never sold it are probably now in profit, that is, they have accumulated an unrealized profit, since in 94% of the past days the purchase price has been lower.

To be honest, many purchases were actually made during the bubbles, especially during the one in 2021. However, it should also be remembered that many BTC were mined during the early years at very low costs and perhaps were held afterwards.

Taking into consideration instead the chart of the percentage of BTC currently in profit, calculated from the market value at the time of the last on-chain transaction, this percentage is still above 80% today.

Therefore, it is possible to estimate that currently about 80% of held Bitcoins are in profit.

Holding vs. Trading

Regarding Bitcoin, it seems that holding is not only much simpler compared to trading, but it is also much less risky.

In light of the above data, it is evident that holding BTC can often yield good results, provided they are not purchased during major bull runs.

Just think that during 2023 the percentage of BTC in profit reached a minimum peak of 60%, so it never dropped below half. However, it should be noted that among these are also counted those that were last moved many years ago and then lost.

In fact, BTC always remain on the blockchain, but if the private keys are lost, they can no longer be used in any way.

Since the keys are not recoverable, once lost, there are many Bitcoins that date back years ago, but should not be counted because they are considered lost (however, no one knows how many there are).

Trading, on the other hand, involves greater risks because when the goal is to sell in the medium-short term, there may not be enough time to recover in case of losses.

Practically until today, the price of Bitcoin has only been able to recover the purchase price of 6% of the days, while it has been able to do so with the remaining 94%. But the BTC cycle lasts four years, so those with shorter time horizons may not have enough time for recovery in the case of a high purchase price.

For example, those who bought during the bubble of 2013 or 2017 had to wait two or three years to return to profit.

Bitcoin holders and profit percentages

The chart of the so-called HODL Waves shows that 16% of the existing BTC has not been used in the last ten years, and over 30% have not been moved in the last five.

More or less 30% is also the number of BTC moved on the blockchain in the last 12 months, with the remaining 40% being moved from 1 to 5 years ago.

Therefore, the vast majority of existing Bitcoins are not used by traders and moved in the medium-short term, but are instead moved in the medium or long term.

In other words, Bitcoin remains an asset more used by holders than by traders, so much so that for example less than 3% are moved daily, and less than 5% weekly.

For this reason, more than 80% of existing BTC are profitable, since the current price is lower only than the one obtained in 6% of the days since it is present on exchanges.