8BTC Captain Achieved 5,000% Return With Weekly Regular Purchase
A “nocoiner” on 8btc forum started weekly regular investment in bitcoin weekly since 2015. By early 2017, he has accumulated over 44 BTC at the cost of around 17,000 USD over the course. At current price, the yield of his investment is over 40 times. And all of his transactions in the past two years could be verified on blockchain.
From “nocoiner” to “wholecoiner”
He registered with user name “手中无比特” (meaning “No Bitcoin in hand”) on 8btc forum in early 2015. Then he started buying bitcoin 3 month later in a way that no one had thought before: regular investment on weekly basis. With regular posting meaningful content, he quickly became the first Captain (account title) on the forum. He was so proud of the title and started calling himself Captain(hereinafter referred as the 8btc Captain).
On 17 December 2017, he posted a summary of his investment experience and his plan for the future.
“From March 11, 2015 to February 6, 2017, Captain invested a total of ¥ 114,621.14 in exchange of 44.31049858 BTC. The average cost per coin is ¥ 2,586.77. As of today’s price, it’s a over 5,000% of return at modest estimation.”
His bitcoin stash is kept in cold storage:
The three addresses correspond with his investment in 2015, 2016 and 2017.
As described in the Captain’s summary posted on 20 December 2015, the Regular Investment Plan was straightforward and practical.
“Starting on March 11, 2015, I will exchange 1,000 yuan equivalent of BTC once a week, which would be stored cold in the following address: 1EkfiNffNHypzZij6vtVAsbDzcHEbNAaJU. I will stop buying when bitcoin price exceed 10,000 yuan.”
The result of the experiment was quite impressive.
“Since March 11, 2015, 41 purchase have been conducted at the cost of 41,000 yuan and 24.55259858 BTC has been acquired with an average price of 1,669.88 yuan (Table 1). Take 3,050 as today’s price, the annual return is up to 82.65%.”
The Captain found that constant purchase is an effective way to defend against market fluctuations.
“When we compare the spot price of bitcoin with the average price, we can find that although the price of bitcoin fluctuates a lot, the change of accumulative average price is more (stable). It shows that regular purchase can effectively even the influence of bitcoin price fluctuation. At the same time, the average price is closer to the lows of bitcoin prices, effectively lowering the acquisition costs (Figure 2).”
Price comparison chart (Red Line: average cost; Blue Line:Bitcoin spot price 2016.03.11-2015.12.16)
Does it work in bearish market?
As bitcoin price was slowly ramping up throughout 2015, such method may not be valid in bearish market. Therefore the Captain did another calculation based on data in 2014, which saw a year-long crashing from $770 to $319.
Bitcoin Price Chart in 2014 (coinmarketcap.com)
“As shown in Table 2, assuming the regular buying started on January 1, 2014, we did 103 purchase costing a total 103,000 yuan in exchange of 46.56949224 BTC at the average price of 2,211.75 yuan. Take 3,050 as today’s price, we can still achieve a 37.90% gain”
Theoretical Price chart ( red: average cost, blue: spot price 2014.01-01-2015.12.01)
By comparing the average cost and spot price, we find that the average cost is slowly approaching the lowest spot price. In the end, small rise may can easily result in positive gain on the book.
“The result of the above calculation shows that even if the regular investment is commenced at the high level of the bitcoin price, very substantial profit can be achieved today.”
Then the Captain reached a conclusion:
“Real experiments and calculations show that regular investment is a solid way of bitcoin investment. One can achieve substantial profits in bull market and lower cost in bear market.”
In 2016, the Captain adjusted his weekly spending from 1,000 yuan to 1,200 to “reflect fiat inflation”. In 2017, he gave up CNY and switched to 200 USD a week. The experiment stopped in February 2017.
“The reason is that bitcoin withdrawal is suspended in domestic exchanges.”
His story has inspired many people to to do the same. The list below plus blockchain record provide solid evidence.