Quote from: Odohu on September 11, 2024, 09:05:51 PM

Quote from: JayJuanGee on September 11, 2024, 07:26:48 PM

Quote from: Odohu on September 11, 2024, 04:07:23 PM

Quote from: Cryptoprincess101 on September 05, 2024, 06:43:03 PM

Quote from: Sim_card on October 09, 2023, 09:06:42 AM

There is also what is called hyper DCA, this method is a kind of pattern that one can buy bitcoin anytime and not with a certain amount of money, just like the way MicroStrategy buys his bitcoin. For you to know that he is DCAing is when you add all the bitcoin that he has bought together, and how many years he has used to buy them. This will give you the average price by month or annually.

Buying Bitcoin at any amount at different intervals without it being the same amount is also good but it is better to use the regular DCAing of same amount at different periods of time because it will enable the investor to be more active and effective in the DCA but for an investor doing irregular DCAing, they might not take it seriously since they feel they can buy at any time they want to but for someone DCA same amount, they are more disciplined and are more likely to get huge accumulations since they are always consistent in their DCA amount.

There are reasons some people do not maintain the same amount which is the DCA method you are describing. It could be a case of cashflow variation in which the investor does not have regular cashflow, sometimes bigger amount and sometimes smaller amount. This way the investor can buy in accordance to how the money comes instead of maintaining the same amount of money. I don't have a problem with this time of approach even though I'm still using the DCA method.

DCA does not require that a person invests the same amount on a weekly basis or whatever is his time period of investments. It does not even require that he does his DCA investment every week or whatever time period, even though he might have had planned every week.

Sure there is a certain amount of value that comes from investing regular amounts and within regular timeframes, those are not prerequisites to DCA, and surely one of the powers of DCA is to be able to tailor it to the cashflows and/or expenses of the person employing such DCA practices... so the DCA can be aggressive in terms of using almost all of the discretionary income or it might be more on the whimpy side and only using a very small portion of the discretionary income or perhaps some place in the middle that is individually tailored.

Thanks for that correction because I thought what define DCA was exact amount at regular interval. So from your explanations, the amount can vary depending on the cashflow but as long as the investment is done at a defined fashion and continuous, then it qualifies as DCA. That means MicroStrategy were actually applying the DCA method in the Bitcoin accumulation; I never thought about this and I erroneously argued that they did not use the DCA method but some other method. Once again, thanks for adding more clarity to my this discussion.

The methods could sometimes be considered as overlapping, so for example if Microstrategy had ONLY made a few bitcoin investments in August 2020 and maybe through November 2020, then maybe we would have suggested that they were lump sum investing into BTC, yet it seems that they started out their investment into BTC as a lump sum investment, and in August 2020, they announced that they had placed something like 75% of their cash reserves into bitcoin, yet largely ever since late 2020, Microstrategy seems to invest into BTC every quarter, or at least they report their BTC buys every quarter, and surely there may well be decisions from them about whether to inject extra cash into bitcoin in various quarters based on their cashflows for that quarter.. but then later, they were not only investing in accordance with the cashflow from their regular business, but they started to employ financialization strategies and largely it could be argued that they still figured out their allocations each quarter so that they could report what they had done each quarter and sometimes reporting what they were planning to do, which usually began to more and more be that they would announce that they were planning to buy more bitcoin with whatever extra cash that they generated from sales but also from whatever cash they generated from various kinds of financial instruments that they created and they got investors to subscribe into or even to use their shares to draw from company equity.

Individuals could engage in similar kinds of strategies as microstrategies, even though most individuals do not have even close to the number of tools that MSTR had in regards to the creation of financial instruments, so usually individuals would usually be drawing from their cashflow and their discretionary income.

Still individuals could have a plan to invest every week, but then they might have difficulties determining how much to invest every week into BTC since their paycheck and some of their bills come in on a monthly basis, so they might not be able to finalize the amounts that they were going to authorize themselves to invest into bitcoin until they figure out what their income is and/or what their expenses are, and so even if their intention might be to invest every week, they might have to skip some weeks based on some extra expenses or some shortfalls of cashflow, yet I would still consider that they are engaged in DCA buying since they are mostly motivated to invest in BTC by their cashflow and/or discretionary income rather than based on BTC prices.

Of course, if someone is increasing DCA amounts during dips, then they may well be combining the tactics and if they get some extra income that comes in while there is a dip and while they are DCAing and buying on dips, yet they might have already been inclined to buy BTC with the extra cash that came in, yet they are even more motivated based on the dip, so in that kind of a situation the methods are kind of overlapping with the rationale for the BTC buys overlapping... even though DCA, buying on dips and lump sum investment each fall into different categories, sometimes they end up overlapping in practice.

We use regular amounts sometimes just to attempt to describe what is happening, not to overly complicate matters and sometimes to make comparisons, so just consider a guy who might have been DCA buying BTC for 2 years, and maybe the first 6 months he was DCAing $100 per week, and then he had some cash flow issues so the next 6 months he was investing $50 per week, and then he went back to $100 per week for the next 9 months, and then he lost his job, and he started performing work that was more erratic, so he wanted to make sure that his income came in before allocating to buying BTC, so maybe during the first transitional month, he reduced his DCA down to $20 per week, and then at the end of the month, he would figure out how much DCA he would be able to do for the next month based on how much cash he had left at the end of the month, and his goals was to try to continue with $100 per week, but he did not want to commit to the amount until his next paycheck arrived - so then he would be able to see how much cash he had remaining from the previous check and he would divide the amount that he had remaining from the previous check by the number of weeks until he was scheduled to receive his next check.. so then in that sense based on his new erratic pay situation, he started to allocate his DCA amounts based on the previous check and not based on the current check. I am using $50 per week or $100 per week, but surely the amounts could end up varying by quite a lot and with weeks skipped and still fit into the classification of DCA investing.