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Merits 1 from 1 user
Re: Buy Buy Buy or Sell Sell Sell?
by
Ruttoshi
on 04/12/2024, 19:34:12 UTC
⭐ Merited by JayJuanGee (1)
But there are a few things you need to pay attention to when doing DCA on bitcoin for investors who often accumulate money with small amounts, such as 10 dollars per week. Maybe it would be better if you don't withdraw the bitcoin you bought on the exchange with that money (10 dollars) directly to your wallet, because this will be slightly consumed by shipping costs. So I think it would be better if, for example, you withdraw bitcoins to your wallet once every two months. Because if for example every 10 dollars (per week) that has been purchased in Bitcoin is immediately withdrawn to the wallet and for example with a sending fee of 0.5 dollars. If you multiply it by 8 deliveries (8 weeks), that's 4 dollars. But if, for example, we withdraw bitcoins to our wallet every 2 months, we only need to pay one transaction fee for sending, namely 0.5 dollars.
You've just mentioned another important thing a new investor or anyone using DCA should put into consideration so that he does not have too many small small UTXO that will later back fire him and eat up most of his profits in future.

Let me explain it for proper understanding, it's good that those DCAing with little amount of money that is not up to $500, should pile it up in their exchange wallet till when the amount of bitcoin accumulated is up to $500 and above before sending it to your self custody wallet to avoid too many small UTXO, if not your transaction fee will be very high in future if you want to transfer those small UTXO of yours.

For instance, if you are DCAing with $50 every week, it's better that you accumulate it till it is $500 before sending it, so that you will be charged with little amount as your transaction fee in future because its only from on output that you will be spending from if you want to withdraw this $500 in future compared to when you have 10 small outputs and you want to withdraw $500 from all of them. This is because the size of your transaction on the blockchain is what will determine your transaction fee.