Bitcoin returns are almost 50% YTD in 2023. They are great now, but the hardest part is realising that for traders who lost 65% in Bitcoin in 2022, they are not at down 15% from 2022 but rather still almost ~50% down

I must say I am quite surprised. The markets and this sub has seen so much jubilation since prices and returns are up. Maybe it is just that their voice are drowned out or that they have left the sub due to disappointment, but I have not come across much at all of a dose of reality for hodlers.

Bitcoin lost around 65% of it’s value from the beginning to the end of 2022. We went from around $46,311.75 to $16,547 thereabout, which amount to about 65% in losses. Yes, 2023 has absolutely started off with a bang, but it is a bang after the dim embers of 2022. We gained nearly 50% thus far for the year, and while they are great numbers, rolling over from 2022, they are just a drop in the bucket in recovery.

If you held on last year from beginning to end, you would have lost 65% of your investment. If you held on from the start of 2023 till today, you would have gained almost 50% YTD. But remember, you gain 50% on 35% remaining from 2022, that is to say you only truly gained ~17.5%. So, you are still down almost 50% from the start of 2022.

This may be obvious to more experienced traders among us, but many new traders stumble into this pitfall. You make risky bets and if/when you lose, you think you can make it back but there’s a reason investment brokerage and exchanges are so profitable. If you lose money, it takes monumental effort and time to make it back just to breakeven. And ironically, big losses tend to make traders take even more risk and lose even more.

Everybody gets wrapped up in the percentage returns, especially on the media and advertisements telling you all the money you can make but never advise how bad a single loss can set you back. Because most just advertise for platforms that want your fees with total disregard to whether you win or lose. And this is exactly how they also get you with leverage, leverage(without really in-depth information, extensive research and a strong market edge which very very few traders do/have) is a losing gamble. And even then it’s still risky which is why firms typically hedge by trading the opposite site in another instrument. You will only win with leverage until you lose but trading platform get their fees either way.

I know this whole post is obvious to some but it is definitely not to all. Don’t just dismiss it.All you see in media is the allure of short-term big percentage returns but not the full reality of risk and even a single loss. I think it very much needs to be said.