Bitcoin is considered a risky asset for short-term investors because of sharp price volatility, but data show a long-term holding strategy can guarantee returns, Cointelegraph, a blockchain media outlet, reported on Thursday.

Investors who bought bitcoin at market peaks since 2017 suffered losses of about 40 to 50 percent within 2 years, but most turned profitable when they held it for at least 3 years. By contrast, investors who bought in bear markets recorded gains of more than 3 times within 2 to 3 years.

An on-chain data analysis found that periods when bitcoin's realised price, which indicates the average purchase price, falls were strong buying points. Since 2015, declines in the realised price signalled a long-term bull market, and bitcoin's realised price recently stood at $55,000, while the moving realised price was about $42,000.

Institutional investors are also stressing the importance of long-term holding. Matt Hougan (맷 허건), chief investment officer at Bitwise, said adding bitcoin to a traditional 60/40 portfolio increased cumulative returns and risk-adjusted returns when held for 3 years. Holding for 2 years produced profits with a 93 percent probability, while the probability of losses fell to 0.7 percent when held for 3 years, 0.2 percent for 5 years and 0 percent for 10 years.

Short-term investors faced a higher chance of losses. Investors who traded on a daily basis posted losses with a 47.1 percent probability, and even those who held for 1 year faced a 24.3 percent probability of losses. The analysis said bitcoin can deliver stable returns when investors overcome short-term volatility and adopt a long-term holding strategy.