Post
Topic
Board Speculation
Merits 1 from 1 user
Re: Buy the DIP, and HODL!
by
Kliss
on 12/06/2024, 05:56:36 UTC
⭐ Merited by JayJuanGee (1)
I don't know if I am right but I feel that only the DCA method can be used to invest in bitcoin and build your bitcoin investment gradually, and at the same time build your emergency funds from the left over of your discretionary income for those new beginners who are not earning much and don't have bulk cash available to use in startingtheir bitcoin investment. This is why I love the DCA strategy but if it can be mixed with buying at the dip when you are prepared, you will get a better result.

The ONLY way that you get better results by mixing buying the dip with DCA is if the BTC price actually dips.  If the BTC price does not dip, then you do not get better results. There have been many times in bitcoin's price history that it did not dip further, so person's employing buy the dip in those circumstances may well not have had been better off than strictly employing DCA.

Part of the reason that DCA is so effective is not because it guarantees that you will have better costs per BTC and the fact is that you may well end up with higher costs per BTC by employing DCA - yet at the same time, you are able to figure out ways to be as aggressive as you can with your investment amount into BTC from your discretionary income - which is quite a good thing for no coiners or low coiners to strive to get a stake in bitcoin and not to preoccupy themselves with short term moves in BTC price.
You make a fantastic point, Mixing buying the dip with DCA only yields better results if the price actually dips. If the price doesn't dip, DCA alone would be just as effective. In fact DCA strength lies in its ability to help investors invest consistently, regardless of market fluctuations, rather than relying on timing the market. You're also right that DCA doesn't guarantee lower costs per BTC, it's possible to end up with higher costs per BTC. However, by investing a fixed amount regularly, investors can take advantage of dollar-cost averaging and avoid trying to time the market.