It looks like there are maybe 12 months out of the last 60 months when buying TQQQ and holding until today would have beaten buying BTC and holding until today.
I ran the numbers last week. Things change fast, but the fact they're in the same ball-park is IMO all I need to validate my position. My point remains: there's a ton of ways to make money that you're missing out on every single minute, and Bitcoin's returns aren't unheard-of. It's just that in the crypto market everyone's risk-reward profile is set to "sweet mother of Jesus" whereas in traditional markets most people focus on capital preservation and slow, predictable growth.
If you set your risk-reward profile to "sweet mother of Jesus" in traditional markets you can achieve the same returns with less risk.
>If you set your risk-reward profile to "sweet mother of Jesus" in traditional markets you can achieve the same returns with less risk.
I wouldn't pitch anyone on putting their net worth in bitcoin or whatever, but I don't think this is true. If you talk to some quant and the quant tells you to scale your allocations to various assets based on their volatility, then if the underlying assets are not very volatile then you end up really levered and can be wiped out in "out-of-model" events, but if the underlying assets are very volatile then you don't have this issue, and you make a bit of money by rebalancing. Your quant will also tell you, if your plan is to buy and hold a "3x long daily return" ETF, that it is the nature of such ETFs to go to zero, and they can say this much more confidently about the ETF than about bitcoin.
I've also found that one can generate returns similar to the returns historically generated by being 1x long BTC with a really conservative risk-reward profile. My current work is to operate a fund based on this finding.
> Your quant will also tell you, if your plan is to buy and hold a "3x long daily return" ETF, that it is the nature of such ETFs to go to zero, and they can say this much more confidently about the ETF than about bitcoin.
This is a common trope, and it is in fact demonstrably wrong. TQQQ is up 160X from 10 years ago. UPRO is up like 60X in the same time period.
Leveraged ETFs "go to zero" in the event the index they track bounces around a mean value or stays dead flat. In the event the index exhibits positive directionality, they do the opposite of going to zero, and instead outperform the sticker leverage.
Over its history the UPRO 3X leveraged S&P 500 ETF has actually tracked about 5X the index.
So their confidence is misplaced, and instead, as I mentioned demonstrates their tendency towards low-risk capital preservation strategies. If you believe in the positive directionality of the NASDAQ moving forward, I doubt there's a better risk-reward profile than TQQQ as it caps your loss on downside while simultaneously exposing you to a lot more than 3X the upside.
[edited for tone not reading as friendly as intended] This doesn't look like going to zero to me ;) [1] Could it? Sure. It's risky.
I'd love to see your fund's performance analysis replacing BTC with TQQQ!
I appreciate this comment. It looks like if TQQQ perfectly tracked 3x the daily return of QQQ defined as the opening-price-to-opening-price or closing-price-to-closing-price return, then it would be up about 64% or 75% on the year (neglecting a dividend), and in real life it's up 74%. Wow!
I don't think that people commonly buy TQQQ futures at annualized premiums of like 40% one day then sell them at annualized premiums of like 20% the next day, so it's harder for us to use TQQQ as the underlying.
