I think the major reason why the DCA strategy is more advisable, it's because when it comes to financial ability almost everyone can actually afford to partake so far as the necessary requirements are met. The DCA strategy is a well effective method for those of us that don't have the financial strength to buy big like a whale and also it's enhances the discipline of the investor because it's something that must be done consistently and it's also saves the investors from any unnecessary needs to selloff their coins to settle bills because that and everything concerning the investment is well settled in the way that the money used or set aside for the consistent buying of Bitcoin is one that really don't much effect in terms of our other expenses.
Well... There's that. But then, regarding the most favorable strategy, whether it's DCA or lump sum or whatever, it all comes down to a personal decision of what works for you, and what level of risk you're willing to accommodate.
With lump-sum investing, you invest a lump sum all at once rather than gradually at regular intervals. Lump-sum investing can generate higher returns as the initial larger sum of money has more time to grow. With dca, you are hopefully, growing the initial amount into a larger amount over time. However, there are also benefits to DCA. It provides a means for people who don't have a lump sum but have regular excess cash to invest immediately, removing the daunting prospect of getting the timing right.
If one is not bothered by any portfolio fluctuations and has a long enough investment horizon, lump-sum would have been optimal most of the time. But being caught off-guard by huge price drops can have massive repercussions if one is forced to exit a position before the market turns in their favour.
What I'm trying to say is that every strategy has its own highd and lows. For example
Due to the single, larger investment, lumpsum investors often face higher initial risk. The value of the investment can experience immediate fluctuations, which could lead to substantial gains or losses.
A 2021 Northwestern Mutual Life study showed that investing a lump sum generally outperforms dcaing over various periods of time. Just keep in mind that this is based on past historical performance, so it doesn't necessarily mean this will remain the case in the future.
When it comes to buying only at dips there are a few set backs that I'm aware of:
Accurately timing market lows can be difficult, causing to missed opportunities or premature purchases.
Not all price drops indicate a true buying on opportunity; some might precede larger market declines.