Post
Topic
Board Economics
Re: What are some financial secrets that you know of?
by
Dr.Bitcoin_Strange
on 30/07/2023, 18:44:02 UTC
I agree with what you said and the example that you have given, but using the price difference in your example is not enough to abandon DCA, as there is not much of a difference between $22,000 and $25,000. If one has a reserve of about $8,000 just for the accumulation of bitcoin and believes the all-time low during that season could be $25,000 but it dropped below that and went down to $22k, which appears to be an added advantage to the accumulator, which is true, but moving forward to accumulate with up to 90% of the reserve funds to me is not a good move, as the same possibility that makes the price drop down to that low level can also repeat itself and it could go down more a bit. I know there is also a possibility of prices going up during that season, but let us always consider both sides while our calculations and our buying decisions should be based on reality.

Instead of using 90% of the reserve funds in a case like this, I will calculate to use up to 3 weeks funds, which could have been $600-800, adding to the present week's own and making my purchase while also observing the market and using my DCA strategy. So that whatever the market turns out to be, there will always be funds to accumulate. Remember that the purpose is not to get a quick profit but to see how much could possibly be accumulated with the fund at hand.

I get your point, and I happen to agree with it, but as much as it may be, and like you have said, we are not in a rush for a quick profit, but buying at that low price ($22k) is still not a bad investment. Remember that if the investor was hoping for the price to drop to $25k and it fell way more than their expectations, then that's really a big opportunity to be invested in. What if the person invested just for the three-week fund like you said and the price took a spike again?

One good way to also invest in Bitcoin is that the person must have a target price at which they want to buy, so that if the price drops to or below their target price, they will just buy at once. In the case of my example, the price of Bitcoin fell way beyond the investor's target, and even if they bought up at once, it's never a bad investment, because their profit will still be huge compared to others who might have even bought at $30k or those that bought Bitcoin during the last bull market at $40k, $50k, and some at $60k.