Hopefully this will be obvious.
Any sort of long-term study involving Bitcoin (BTC.X) is built on a growth rate that can't be repeated. Over the last ten years, Yahoo Finance has shown Bitcoin is up 32,000%. That unrepeatable gain is built into the impact cited of 1% added to the portfolio.
It has been a while since we included Bitcoin in one of our studies, but I typically didn't go back further than 2021, where I have the yellow line because of the unrepeatable nature of some of the earlier returns.
Backtesting is useful but not infallible. I try to point out flaws that I see in some of the backtests we do, but this one with Bitcoin is especially easy to observe.
A quick follow-up to yesterday when we looked at the MKTN ETF, which hasn't been around that long. It turns out there is a mutual fund version with the Federated Hermes MDT Market Neutral Fund (QQMNX). Hat tip to reader Max for finding this fund. For some reason, Testfol.io only goes back about five years with that fund, but it is quite a bit older. Portfoliovisualizer lets you go further back.
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