Bitcoin Strategy by Fred Krueger Shows Higher Returns Than Yield Assets

Fred Krueger's 10-year Bitcoin model shows $49.7M outcome from steady selling, compared to $11M using yield-generating assets.

Selling Bitcoin cautiously for income outpaces reinvestment in traditional high-yield assets like real estate, even with taxes factored in.

Borrowing against Bitcoin and using crypto-related stocks or ETFs may offer alternative strategies with varying risk and reward.

Fred Krueger, a prominent investor and author of The Big Bitcoin Book, has shared a detailed financial model demonstrating the long-term benefits of using Bitcoin as a primary asset. Posting to his 163,400 followers on X, Krueger compared two portfolio strategies over a 10-year period, each beginning with $2 million.

In the first strategy, Krueger assumed a 40% compound annual growth rate (CAGR) for Bitcoin. The model includes an annual withdrawal of $100,000 to cover expenses, with a 20% income tax applied. Under these conditions, the portfolio would grow to $49.7 million in cash by the end of ten years. The approach highlights the potential of steadily selling Bitcoin instead of switching to alternative assets.

Real estate-focused strategy yields $11M

Krueger contrasted this with an alternative plan in which 80% of the portfolio, or $1.59 million, is invested in a 10% yield-generating asset such as Texas real estate. The remaining $410,000 is held in Bitcoin. By the end of the same ten-year period, this approach would result in $11 million. According to Krueger’s analysis, the Bitcoin-focused strategy produces significantly higher returns.

The post attracted widespread attention from the crypto community. Several users noted that while the Bitcoin strategy appears promising, it depends heavily on the timing of asset sales due to Bitcoin’s volatile price cycles. Some pointed out that borrowing against Bitcoin rather than selling could preserve exposure and avoid capital gains taxes, despite the 12% interest costs involved.

Alternatives and risks considered

Users also mentioned other alternatives such as MicroStrategy (MSTR) stock or options-based ETFs like MSTY. These instruments may offer different risk-reward profiles for investors seeking exposure to Bitcoin-related assets without direct holdings.

At the time of Krueger’s post, Bitcoin was trading at $104,500, marking a 1.5% drop in the previous 24 hours. The cryptocurrency remains the largest in the market by capitalization.

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