Since we are always buying through DCA, it will be difficult to always determine our entry point. For me the holding period is the main priority in this case. It will be foolishness for me that doesn't have up to one bitcoin to compare my profitability with someone who have up to one bitcoin or more. But if someone who has up to a bitcoin sell of early and I continue holding my bitcoin for many years, there is every possibility that my profit will get to his level when he sold of or more, because we don't know the amount that bitcoin will get to in the future.
Actually an investor who is slowly coming up using DCA method to accumulate Bitcoin shouldn't compare themselves or trying to compete with those that has already started investing on Bitcoin for long because always trying to get an amount of investment other investors have could lead to aggressive investment were as you will put everything you have just to remain on the competitive trends, although there is no harm trying to accumulate as many Bitcoin as you can but trying to compete or reach out to other people amount of investment is not wise because it could lead to aggressive investment which could sometimes cause by fear of losing out, so perhaps in as much as DCA method takes a while before getting a reasonable amount of Bitcoin but is actually the best and you would be surprised with the amount of Bitcoin you will realize from ten years and above.
This is a good point.
A person might want to be as aggressive as he can be within his own means to acquire as many bitcoin as he is able to do, and there is nothing wrong with that as long as he does not cause something like the wealth (or the earlier BTC adoption) of someone else to cloud his own visions regarding some of his own limits.
There is no problem with some healthy levels of competition, since it is quite likely that many of us engage in a certain level of competition, yet there are also some needs for measuring our own levels of aggressiveness in reasonable kinds of ways in order that we do not end up overdoing it or even contributing to our own levels of becoming too emotional in the ways that we are investing and/or protecting ourselves..
Let's say for example, there are two guys of very similar economic status and maybe in their early 30s, and maybe they earn around $40k per year and they are able to save and/or invest around $4k (10%) to $10k (25%) per year - depending on how aggressive they are or how much they had been building up their investment portfolios.. so if each of them had been investing and/saving for 10 years, there could be quite a bit of variance in both the size of their investment portfolio and also what is contained in their investment portfolio, and after 10 years investing,
Guy1- Earlier bitcoin investor with 10% investment - might have around $40k invested - but he discovered bitcoin 7 years ago.. so he has around $22k invested into traditional investments like stocks ($8k in his first 2 years and then $14k in his last 7 years).. and around
$18k invested into bitcoin at $50 per week that resulted in about 2 BTC. If we assume around a 50% increase in the value of his traditional investment, his
total investment portfolio is worth about $161k ($21k stocks + $140k BTC)
Guy2- Later Bitcoin investor with 25% invested - might have $100k invested but only invested into traditional investments of stocks, and just discovered BTC... so
the total value of his investment portfolio might be around $150k.. so this guy surely could catch up to the earlier guy by starting to invest aggressively into bitcoin at around $200 per week (or even lump sump moving some of his earlier investment into BTC), yet it does not seem as practical to lump sum invest with all of it, so he has to find some kind of a balance and then start to pursue bitcoin with $200 per week and he will likely end up passing up the guy who is ONLY investing 10% of his income.. and perhaps only 5% into bitcoin.
On the other hand, if there were a
third guy (guy3) with the same demographics as the other two and a 15% per year investment of his salary which would be $6k per year and a total of $60k invested over 10 years - but who had taken both a more aggressive bitcoin stance and a more aggressive overall investment stance than the 10% guy but not as aggressive as the 25% guy, yet who had also discovered bitcoin around 7 years ago and who had been investing into bitcoin for the last 7 years at $100 per week, and who continues to invest at $100 per week.. so his total portfolio has $23,500 invested into stocks and then
$36,500 invested into bitcoin with 4 BTC accumulated So his
total portfolio would be $315k ($35k stocks and $280k BTC)
The second guy who is investing 25% per year for the past 10 years is the most aggressive of the three investors, yet his total portfolio has performed the worst over the past 10 years, and since in this scenario, he had just discovered bitcoin, he surely could catch up and pass the first guy in a fairly short period of time, yet if those two guys were to maintain their same pace, it could take him 15-20 years to catch up to the third guy since the third guys in not overly aggressive, but he is maintaining a pretty good pace of $100 per week, and he might never catch up to the third guy unless he increases his income and/or cuts his expensive, but he might not have as much room to work with since he is already aggressively investing 25% of his income at $200 per week-ish, so it is not always easy to either increase your income or decrease your expenses in order to be able to invest more, so in some sense, the second guy just has to continue to invest at his own pace and there may be some points in which he ends up catching up to the third guy. but surely no guarantees and probably no reason to really overly stress out about.
.....because most users here are planning to hold for 4-10 years even more than . So with such , you can have enough time to accumulate some good quantities in your portfolio.
I think that many of us are pushing the idea that every time that a long term investor adds new capital to his investment, then that new capital should be considered in terms of having a 4-10 year or longer timeline before it is going to be needed (or wanted), so surely if a guy is investing for 4-10 years or longer, by the time he gets into his 6th year of investing, he is going to have some of his earlier investments that have been brewing (or sitting for 6 years or so) and then his later investment amounts would have not had as much time to brew (or to compound or to grow in value).. ... of course, the longer that he is investing the more options that begin to develop regarding how he might change the way that he builds and/or maintains his investment, so it would not really start to make sense to both buy and sell at the same time, but if he has enough time building, he might get to a point in which he thinks that he is able to somewhat attempt to play the trends.. but not necessarily structuring any sales in a way that he expects to be able to buy back.. so if he does not quite have enough (or he mis-measures how much he has versus how much he thinks he has), then he could end up running into a situation in which he sold too much too soon and/or he failed to continue to maintain enough focus on ongoing BTC accumulation.
You are actually right on this, if you look at the historical price of Bitcoin over the years, it has practically gotten better with age, it has behaved like a fine 🍷 wine, so it's even more likely that the more you hold unto your Bitcoin investment, the more you make more money out of it, so to me, sometimes I feel sorry for those that sold now, even though they sold at a profit, because the actual price of Bitcoin is no where near it current price like in 5 years time from now, and I also believe that due to it limited supply, it's a certainty that at some point, it price will skyrocket to a figure that even we, it supporter never expected.
At some point I feel the need for us to be mindful of our choice of words, in order for us to give an information that will not be misleading, I believe that the only thing will could do is to speculate about the ups and down movement of Bitcoin and
there is no certainty as to this regards just as you have stated earlier.The market is filled with uncertainty that is to say it also has risk assessment though there is a lower risk when it comes to Bitcoin investment.
Surely there is no certainty.. yet we might need to consider what we believe to be possibilities.
No one responded to my post from a few days ago in this very same thread when I attempted to assign some probabilities to where I speculated that the BTC prices might be 10 years from now... It was how I was thinking about the topic at the time of the posting, and sure the probabilities might change with the passage of time (and the happening of events), too.
So maybe the odds that you come to calculate might look something like the below that in 10 years BTC will:
1) Go to zero (or less than $10) (and not recover) - less than 1%
2) Go to a price that is between $10 and $1k (and not recover) - less than 5%
3) Go to a price that is between $1k and $10k (and not recover) - less than 8%
4) Go to a price that is between $10k and $35k (and not recover) - less than 9%
5) Go to a price that is between $35k and below the current price ($66k-ish) (and not recover) - less than 10%
6) Go to a price that is between the current price ($66k-ish) and $150k (and get stuck there) - around 10%
7) Go to a price that is between $150k and $500k (and get stuck there) - around 12.5%
8 ) Go to a price that is between $500k and $1m (and get stuck there) - around 12.5%
9) Go to a price that is between $1m and $2m (and get stuck there) - around 12.5%
10) Go to a price that is between $2m and $10m (and get stuck there) - around 12.5%
11) Go to a price that is higher $10m - around 7%
[edited out]
Just as you said , imagine those that started their accumulation five years back imagine the profit they have Made (depending on the number coins they have accumulated so far though). But you can see that chances of them selling in loss is damn low, because they embark on long-term holding
We do not have to imagine, even though we could describe a certain kind of hypothetical of a guy who might have invested $100 per week for the past 5 years, and consider that their older bitcoin are likely more in profits than the more recent bitcoin, even though right now when BTC is bouncing around within 5% of the ATH territory, it is pretty much every single person is going to be in profits, and the longer they have been accumulating, the more profits that they would have put themselves in.. so long as they had not screwed around with trading and/or leverage (which may or may not have helped themselves in comparison to a more strict ongoing, consistent and persistent DCA strategy.
$100 per week of BTC accumulation over the past 5 years would have had resulted in
$26,100 invested and 1.5578 BTC accumulated (currently worth about $109k - about 4.2x returns), and maybe not enough to feel comfortable to be at entry level fuck you status, but surely enough to cause a person to feel pretty good about his progress and the options that the BTC stash is providing.
Another example would be a guy who might have started investing 10 years ago at the same amount of $100 per week. He would have had invested
$52k into BTC and he would have accumulated nearly 44.4 BTC (which currently would be worth about $3.1 million - about 60x returns).. so there can can be quite a bit of value that comes from allowing additional time to pass - even though it seems quite unlikely that BTC is going to be returning such great returns...
None of us should be complaining even if BTC were to at least keep up with inflation (the debasement of the dollar and other fiats), and any kind of extra return would be a bonus... yet surely we are going to be more inspired to aggressively invest into bitcoin when we consider that it has good chances of beating rather than merely matching the performance of other possible places to put our value to save/invest.
Just make sure that when you DCA, you're not spending the money that you're going to use for your food or utilities.
That's the reason why it is important to consider as well on what kind of money you'll use as you DCA. But some investors goes to the tough path and they're spending money that's allotted into something important but they are sacrificing that expenses to buy Bitcoin.
But don't do that, it's why we're all advising everyone to have some other source of income and only invest what you can afford to lose.
exactly, anyone that's doing such is just executing poor planning. The best way to Investing is not having good cashflow alone , but how you plan and handle things. By using the DCA strategy to accumulate according to your cashflow, set aside an emergency funds for covering expenses. And also have a reserved funds to use whenever one have the opportunity to buy using this other accumulating strategy to purchase. There's another important things , which is how consistent you are with your DCAing and to keep on learning more things on how to secure a good investment.
You really have to set and plan out your DCA if you're going to do that because if you don't, big tendency of you dumping the Bitcoin that you've just bought is high.
After I had written my whole response, @jossiel, I come to realize that I had misunderstood your points... so I went back through my response to attempt to fix it a bit.. .. but when I saw that it still might contain some of my earlier misunderstanding.. I decided to change my response.
I agree that a guy might believe that he has everything figured out, and then he ends up getting frustrated because he ends up buying at top.. and he had not really adequately planned for the correction, even though he thought that he was sufficiently prepared.part of the trick is to get out of the trader mindset and get into the investor mindset.. which means to prepare yourself to be holding your investment into BTC for 4-10 years or longer no matter what the price does.. .. so if you are overly worried about the price, in regards to whether you are in profits or in the negative, then you likely have not prepared either the correct mindset of the correct approach that will prepare yourself to deal with the likely inevitable volatility of BTC prices... so preparing financially is figuring out position size but also having your financial matters in order that includes your maintaining emergency funds, reserves and a float.. emergency fund should be at least 3 months, but if you have complicated things going on in your life that either potentially involves expenses that could come up or fluctuations and/or drying up of your cashflow, then you need emergency funds that cover longer periods of time.
Also if you invest into bitcoin for 1-3 years and then the price goes shooting up and you cannot control your emotions because you see how much it had become worth and you just cannot resist but to tap into it, then likely you have to figure out some way to deal with that.. since what is it that you are wanting to do with the money? Are you wanting to consume? or you want to diversify into other investments? or what is it that causes you to get worked up about it? It could be that even though you are still in your BTC accumulation stage that you might have to take some off the table and to invest into other things because you cannot handle how much it had become, even though you should also realize that the amount of BTC that you might never be able to get back the amount of BTC that you end up shaving off.. so that should be factored into your consideration regarding how much BTC you feel that you need to shave off, and you should be attempting to do these things without emotion.. so that you had somewhat preplanned them rather than acting out too rashly merely based on sudden changes in the BTC price.And that's no common sense for you when you do that as you're just going to throw up your money again to it. Why it should be important for you to plan it?
I agree it is good to attempt to think through the various scenarios and try to be prepared, even for extreme scenarios. You don't like the idea of planning?
Yes it can be difficult to plan for everything, yet we can set out some scenarios so that we are somewhat prepared to mostly know what we are going to do, and so if we end up doing something, we are already in the ballpark of what we had already planned, even if we might not have had planned the specific situation that ends up playing out. We are likely not going to be able to completely know how certain matters will play out, but we should have a certain level of preparation for a variety of scenarios and also for some scenarios that go beyond our expectations.To avoid scenarios like this that you have no option but to sell the purchased Bitcoin of yours.
It is true that if the BTC price goes shooting up, guys end up not really being as prepared as they thought that they were. That is not true.
You could plan that you are not selling any BTC if the price goes anywhere between $80k and $180k in the next 1 to 9 months.. and then maybe you have some plans that if it goes faster than that, then you might end up selling some.. even though you already might know that you are in accumulation phase and if they BTC price keeps going up then you have to make sure that you do not sell too much too soon.. so there are risks for any guys who are selling some of their BTC and they already know that they do not have enough BTC. But if you have done it and you have spare money in doing it, you'll not be forced to sell it when you are in need.
That is getting back to the idea of having your finances otherwise in order.. which is also having certain amounts of funds..
You may well be in another position jossiel than a member who is brand new to investing into bitcoin.. especially since you have been registered on the forum for more 8 years and 3 days.. happy anniversary.. so yeah if you been in bitcoin longer than you might have more luxuries in terms of how many BTC you have already accumulated.
Let's say for example that a guy has only been into bitcoin for a year and a half (looking at I_Anime), his income is about $36k per year, $3k per month, and he is investing about 15% into bitcoin which is $100 per week which is $5,200 per year and $7,800 for 18 months), he had continued to maintain a 3 month emergency fund and also 3 months of reserve funds, so if he had only been investing for 18 months,
his investment into bitcoin would be merely around 0.282 BTC - which currently is close to $20k in value and slightly more than 6 months of his income (if we are looking at BTC spot price) .. so he should feel pretty good about all of that, and he has a steady income and is investing around 15% of his income into BTC, but then if the BTC price were to double to $140k, then all of a sudden his BTC holdings are more than 1 year of income.. and so if BTC prices double again to $380k, then he would have 2-3 years of income in his BTC holdings.. so then he might start to think that his investment is getting ahead of his levels of preparations, and he might have to take some BTC off the table in order to either bolster his emergency or reserve funds, or perhaps he starts to feel some needs to have some of his value in other assets/investments.. and so there is nothing wrong with having some of those kinds of considerations in advance and even plans to take some off of the table, even if the guy might have concluded that he does not have enough BTC.
I actually suspect that I_Anime does not even have that good of finances in place, .. but I don't know, yet these would be the kinds of considerations that a newer guy into bitcoin would have to attempt to take into account and try to plan around so that he can control the amount that he sells or does not sell and to consider if there might be some price points in which it does not make sense for him to continue to DCA.. and either just to hold those funds or maybe put them into other assets.. which are all trade offs, in which some guys will just continue to accumulate BTC for more than a whole cycle before getting into any ideas of selling any BTC or even discontinuing their DCA... but part of the problem is reality.. and the reality may well be that the job of any newbie is not really paying very high wages as compared to the appreciation of their BTC (at least the appreciation that may not end up being sustainable)