Digital Credit vs T-Bills How much mark-to-market uncertainty should an investor rationally accept to capture materially more cash yield - and what happens when that income compounds for a decade? Start with a five-year checkpoint. I ran 500,000 simulated paths per model, starting with $100,000 in each and reinvesting the income. For Digital Credit, I assumed a 13% annual cash distribution, 6% annualized price volatility, and price mean reversion toward $100. The main scenario assumes every scheduled distribution is paid. These are hypothetical inputs, not measured characteristics of a particular security. For T-bills, I modeled rolling three-month Treasuries with a 4% starting yield and a 3.5% long-run mean. Rates fluctuate, bills are marked daily, and principal plus interest is reinvested at maturity. The model does not assume the starting income rate lasts forever - or that rate volatility equals investment-return volatility. After five years: Digital Credit: $190,965 median ending wealth. +91.0%. T-bills: $119,876 median ending wealth. +19.9%. A $71,090 difference between the median balances, on the same $100,000 starting investment. The middle 90% of simulated ending values ran from $179,083 to $203,690 for Digital Credit, versus $115,488 to $124,441 for T-bills. Those are conditional model ranges, not guaranteed floors or ceilings. The price of the extra income showed up along the way: median maximum drawdown was 5.03% for Digital Credit versus roughly 0.03% for T-bills, measured on daily total portfolio value. But a smooth price model can make a credit instrument look safer than it really is. Six percent volatility does not impose a six percent limit on losses. So I added the dashed orange stress line: at year three, recover only 50% of the credit position’s then-current market value, stop all subsequent credit distributions, and roll the recovery into T-bills. That separate scenario ended with median wealth of $79,078. A 20.9% loss on the original investment. I am not assigning that event a probability. It is a stress test showing how permanent impairment can overwhelm years of income. The base-case income gap is substantial. Whether an investor can capture it depends on payment continuity, reinvestment opportunities, and the balance sheet supporting the instrument - not the smoothness of the chart alone. A Monte Carlo can calculate the consequences of your assumptions. It cannot underwrite the issuer for you. Hypothetical five-year model; no specific security modeled: