Post
Topic
Board Speculation
Re: Buy the DIP, and HODL!
by
Hewlet
on 06/02/2024, 05:35:44 UTC
Lest assume this senerio that, Mr A uses DCA uses DCA to accumulate bitcoin as his only strategy and he has an income of 2500$ and decides to allocate 10% to buying bitcoin weekly, so he buys at the first week at a price of 45,000$ and second week at 50,000, third week at 55,000$ and finally at 50,00$, he ends up buying at an average price of 50,000$ and accumulates a total of 0.05 bitcoin for his first month for an uptrend market.

Let say the same allocation with an down trend market of 49,000$, 45,000$, 40,000$ and 39,000$ price at each buying interval, he ends up accumulating a total 0.0578 bitcoin at an average price of 43,250.
i doubt that buying using DCA method is an automated system that auto buys the Bitcoin on a fixed week, month or year regardless of the rise in the price of bitcoin. Even if I'm using the DCA method to buying my bitcoin and after the first purchase I notice an increase and then another increase that Is way higher that the first price I bought my first Bitcoin, from a personal point of view, I would rather sell my holdings at the peak of the price rather than buying at that price. Their are range of price that if you buy at such price, you are very certain to have a loss or to hold your bitcoin for a very long time if you want to gain anything you of your investment. So using the DCA method doesn't mean that you should close your eyes to the reality that their are certain price that bitcoin will climb to that you should be considering more of selling your holdings rather than buying or accumulating more bitcoin regardless of whether that was the time you set out for the purchase of your bitcoin.

One thing you should also understand is that the whole essence of investing into bitcoin is firstly to make profit and maybe in some context we might talk about saving your funds in a secured place that you're sure is void of government policies that will negatively affect and so the strategies you are going to use in accumulating your bitcoin and how you go about using the strategy is basically going to be centred around making profit at the end of the day.