So if a newbie starts out with $100 per week, then it could take a year for the newbie to invest up to $5,200 into bitcoin, yet if the newbie comes to bitcoin and he already has $6,000 that he can invest right away, then he may well want to consider that $6k in terms of the three categories, and his decision on how to treat the $6k might also end up how he considers to treat the $100 per week that he had already been planning to do.
You’ve made quite a very fine point here.
Bitcoin investment approaches may indeed vary based on the differences in the financial goals and stance of each individual that plans to invest in Bitcoin.
For instance, an investor who plans or chooses to invest in Bitcoin with a weekly budget of around $100, it’ll take lots of discipline, self control and patience to be able to actualize $5,200 in a year, while another investor who wishes to invest $6k upfront may be seen as one who has more flexibility than the other investor.
I think that part of the point that I was attempting to make is that it would be different for a person who has $100 per week to invest (for a year) and the same guy who also has $6k that he has with him right at the start.
The guy may or may not choose to adjust his $100 per week DCA, and the fact that he knows that he has an extra $100 coming in that he is going to be able to buy BTC with is not going to change merely because he has an extra $6k up front, so he could still choose to invest the $100 per week, or he might consider other options as is implied by the mere fact that his situations is much better in terms of options if he also has the $6k that is available to him... On the $100 per week part, he might not be able to reasonably front load his investment in to bitcoin, so each week he has to wait for the $100 to come into being available. Nice to have more options.
The other comparison that you are making is one that has $6k up front but does not have $100 per week, and from my point of view, sure those kinds of situations are going to happen, yet it seems one of the more realistic consideration is that people invest and they also have a cashflow that they manage that allows them to be able to invest more as the money comes in and if the money happens to be discretionary income that is money in excess of what they need for their expenses.
There will certainly be a huge difference in their investment strategies. The person who chose to invest $100 weekly would focus more on the DCA strategy,
I still think that we are making different points, because in my hypothetical, I am presuming he does not have that $100 per week in advance, and he is only able to invest $100 per week as it comes in. His only other option would be to just let the $100 per week to pile up in order to buy on dip (if there is a dip), and if there is not a dip, he is risking that he might have to buy BTC at higher prices rather than if he were to just buy each week as the $100 comes available.
and have the patience and self control to invest regularly, regardless of the market’s fluctuations and by so doing, he’ll be able to ride out volatility while focusing on the long term growth and trajectory of Bitcoin. And such an investor is most likely to prioritize continuous education and staying informed on updates about Bitcoin investment, in order to make certain adjustments if/when necessary.
I think that we are making similar points here.
While the other investor on the other hand with $6k to invest upfront would rather choose to lump sum the whole amount while also planning for the long term goals based on his own personal risk tolerance and the asset’s potential returns.
It’s all about identifying your personal financial situation, goals and level of risk management/tolerance level.
I might not have had made my hypotthetical very clear since I was trying to suggest that the only difference between the two is that one of them had an extra $6k upfront that he was able to invest, otherwise each of them had an income that was sufficient that he would be able to invest $100 per week into bitcoin.
I am also suggesting that the three options available for the guy with $6k to supplement his already exiting $100 per week DCA also involves considering how to treat the upfront $6k by considering that money into the three categories of DCA, lump sum and buying on dip.. and sure he could divide 1/3 into each of those categories or he could decide some other way of apportioning within the three BTC accumulation categories.