Had some free time today, so I decided to fire up MATLAB and try to create some BTC/USD polar (a.k.a. spiral) price chart visualizations.
Trying to catch up and not really up to posting but this is a great chart visualization you setup so had to comment.
What is the absolute minimum time frame for length to be in profit.
Obviously its in between the 2 and 4 year but i'd like to know the exact timeframe as it would be nice to see if it holds as we progress.
[...]
On to your question, which is very interesting, and is one that also came into my mind while writing the visualization code and observing the results. You're right, the profit threshold is between 2 and 4 years. This is obvious, by comparing the plots for Case 4 and Case 5. Answering the question programmatically is not very trivial, so I found the answer graphically, by observing adjacent plots (one day apart), around the time point the spiral untangles. It turns out that
the profit threshold is at 1096 days. This is around
156 weeks, or
exactly 3 years. The funny (and interesting) thing is that this threshold is EXACTLY 3 years to the day (1096 / 365.25 = 3.0007)! The price point at that time is just under $20k (around $19,700).
Edit: After posting this, I did some verification of the price data, just to make sure I haven't made a mistake. Everything checked out, but what I also realized was that
the time the spiral untangles is on 17 December 2017—the exact time point of the 2017 ATH (for the older cycle). Hence the price of just under $20k! For the newer (outer) cycle, the time point is 1096 days (3 years) later, which is on 17 December 2020.
[...]
Maybe I am misunderstanding Hueristic's question or the point that is being made, but I was thinking that Hueristic was asking at what timeline point do the spirals never cross again because the BTC price never goes below the earlier high price, and we should be able to do a quick look at the spot price numbers on regular charts and find the various highest price points, and then look at the subsequent chart data to find at what point the BTC price gets above the previous ATH and never goes back below such earlier ATH price point, ever again.
You seemed to have considered the December 17, 2017 to December 17, 2021 timeline to represent such longest period crossing point, but it seems to me that our November 30-ish 2013 (at $1,163-ish) to April 3-ish 2017 would have been longer because in March 2017, the BTC price went below $1,163, and did not get back above $1,163 and stay above $1,163 until about April 3rd-ish (which result in a gap of right around 1,220 days rather than your result of 1,096 days)
Sorry for not being able to properly reply to your comments Jay, just
REALLY busy IRL...
What Hueristic was asking about was the
minimum length of investment that has resulted in profit, regardless of
when the investment was made. In other words, suppose someone simply bought some BTC
at any time since 28/11/2014 (the starting point of the data set I'm using) and then waited. What is the minimum amount of time that he/she would have to wait, in order to be in profit? Notice the condition of the question: buying BTC at
ANY TIME (even at the top). According to my analysis in the quoted posts above, the answer is
exactly 3 years.
The reason why the spiral untangling occurs at the 2017 ATH is easy to explain. The 2017 ATH was the reason the spiral was tangled in the first place. That was an unnaturally rapid price growth, that caused the two spiral cycles to merge in between each other. So, as the spiral gets compressed by my algorithm, and the spiral cycles shift along each other, any spike present in them, such as the 2017 ATH, would necessarily be the point of untangling, as the outer spiral cycle's price gets progressively higher, until it surpasses that spike, thus untangling the entire spiral. OK, that explanation may not be very clear, but that's the best I can do right now...
As for your earlier question about why I "chose" 28/11/2014 as the starting point of my data set, well, that was the data set I managed to find by Googling, that was easy to download and in a format that could easily be imported to MATLAB for processing. So, it was purely a practical reason, with no relation to price dynamics. I did manage to find price sources going back as early as 2009, but I was not sure of their validity/reliability, so I chose the Bitstamp source I found, which started from 28/11/2014.
Edit: Typos & syntax.
