How to Read a Crypto Portfolio Simulation Fan Chart
Published 2026-07-16
A fan chart visualizes the range of outcomes across many simulated paths at once, rather than showing a single projected line. At each point along the horizontal (time) axis, the chart typically plots several percentile values calculated across all simulations run for that specific year.
The median line (50th percentile) represents the 'middle' outcome — half of all simulated paths ended up above this line at that point in time, and half ended up below it. It is often mistaken for an 'expected' or 'average' outcome, but it is technically the middle result, which can differ from a mathematical average, especially in a skewed distribution.
The 10th percentile line shows a relatively unlucky outcome — only 10% of simulated paths did worse than this at that point in time. This line is particularly useful for stress-testing a plan: if the 10th percentile outcome would be unacceptable (for example, running out of money well before your goal), that's a clear signal the underlying plan carries meaningful risk, even if the median looks comfortable.
The shaded band between the lower and upper percentile lines represents the range of typical outcomes. A wide band signals high uncertainty — appropriate given crypto's volatility — while a narrow band would suggest more predictable, lower-variance outcomes. Reading the width of this band, not just the median line, is essential to understanding the actual risk in a simulated plan.
Frequently Asked Questions
Should I focus on the median or the 10th percentile?
Both matter for different reasons: the median gives a sense of the typical outcome, while the 10th percentile gives a sense of downside risk. Relying only on the median can create an overly optimistic impression of a plan's safety.
Why does the band get wider over time?
Uncertainty compounds the further out a simulation projects — small differences in early-year returns can diverge into much larger differences in later years, which is why fan charts typically widen further from the starting point.