Post
Topic
Board Speculation
Merits 2 from 1 user
Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
by
AlcoHoDL
on 20/04/2022, 15:27:48 UTC
⭐ Merited by JayJuanGee (2)
[...]

I doubt that anyone of us can push anyone towards how they engage in such early stages of BTC accumulation, even though DCA seems to be amongst the best of place holder approaches, and for sure lump sum investing and buying on dips can have some risks in terms of the possibility that the BTC price could go down before it goes up.  There are ways to balance all three approaches, but likely ONLY after some internal assessment of ones own individual circumstances which includes looking at cashflow, other investments, timeline, view of bitcoin as compared with other investments, risk tolerance and time, skills and abilities to plan, strategize and to learn along the way, which also may well involve tweaking strategies along the way, too.

There's also an element of determining establishing initial BTC stake - and then once achieving such initial BTC stake - which also could take a year or more to establish... then to determine how to manage such stake.. or to perhaps adjust the stake upon reassessments.  An initial stake could also involve putting 1% to 25% of overall investment portfolio value into BTC, and for sure the amounts are quite discretionary including that each individual might well end up having quite a different approach from another individual based on some minor differences in the individual circumstances (as I have already mentioned above).

Capisce?

I cannot stress enough the benefit and importance of DCA, especially for Bitcoin newbies. Buying and HoDLing Bitcoin (regardless of method) is a winning strategy in the long term, but there are ways to maximise the return of your investment. Enter DCA. What DCA does is that it takes the randomness of volatility out of the equation by effectively averaging it out between many small purchases over a given period of time, whereas lump sum investing is like throwing a dice and hoping for a 6, but might instead end up with a 1. Given a sufficient number of small purchases temporally spread out, DCA achieves an average dice result of a 3 or a 4, so it effectively protects you from buying at the top.

Of course, when it comes to Bitcoin, even a 1 is a win long-term, but why not aim for a 3 or a 4? DCA can do that. Just add time.