Not all investments lose value equally: A recovery period for digital assets

cointelegraph.com:

When investing in financial markets, people often underestimate the possibility that, over a period of time, the investment may lose its value, and it will take time to recover temporary losses. The deeper the loss becomes, the more energy required to recover the losses increases out of proportion. If I invest $100 and lose 10%, I end up with $90 (whether I keep the investment or liquidate it). So, to get back to $100, which returns do I have to make? I have to make 11% because, with a base of $90, if I make 10%, I end up with $99. This effect is amplified if I lose 20% — to get back from $80 to $100, I will have to make 25%.

So, the losses are not exactly symmetrical to the gains you must make to recover them. If I find myself having lost 50% of my investment, to get back to $100 from $50, I must double it, so it should be intuitive to the reader that the more the loss is amplified, the more energy required to recover.

The bad news is that Bitcoin (BTC) has lost more than 90% of its value on one occasion, more than 80% on two other occasions, hitting during this period a performance percentage of -75%. But the good news is that it has always recovered (at least so far) from losses in a very reasonable timeframe — even the heaviest losses.

Related: Forecasting Bitcoin price using quantitative models, Part 2

The Ulcer Index, i.e., the index created by Peter Martin that calculates how long an asset has been below the previous high, is crystal clear. Investing in Bitcoin leads to ulcers for many months, but then leads to incredible returns that, if one has the patience to wait for them, make one forget the period of bellyaches from the losses incurred.

Compared to the previous two graphs, which cover a period of 50 years while