Friday, April 19, 2013

Bitcoin graph

Here's a logarithmic graph of bitcoin prices to date. The long term trend is clear. Bitcoins prices grow as a straight line over time. Since this is a logarithmic plot, that means the prices are actually growing in a consistent exponential.

Put another way, the percentage returns are huge and consistent. How huge? Do the calculation yourself. Print the graph, draw a fit line. Measure the slope. You will see that the price multiplies by 10 every 13.5 months. That works out to consistent 675% returns.

What does this mean for the investor? It means the sellers are irrational. If you managed to buy at the peak, don't sell in the panic. Just keep your bargain and wait 18 months to get your money back.

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