Post
Topic
Board Speculation
Merits 1 from 1 user
Re: Buy the DIP, and HODL!
by
btc_angela
on 01/01/2025, 23:08:49 UTC
⭐ Merited by JayJuanGee (1)
<>
Let's say that a person similar to you (Sim_card) had been investing into bitcoin for nearly 2 years as aggressively as he is able to do, whether that is $100 per week or some other amount, and eve from time to time, such person might come across extra money that he is able to invest into bitcoin, yet he might have to weigh whether he wants to invest all of the extra money right away or if he might want to split some of the extra money into buying on the dip and/or DCA.
Investing $100 per week is about $10,000 but if by any chance he received extra money and invested it in Bitcoin his portfolio might probably be more than $10k. But I think it would be a bit hard for him (including me) to weigh if he's going to invest them at ones on during the dip or DCA. However, I would prefer to invest them all at once while using the DCA strategy, the only thing there is that I will increase the amount I want to DCA with only when I have extra free funds. Although it wouldn't be a bad idea if I invest it during the dip, I just prefer the DCA method. The reason why I won't choose the dip is because I might not have the opportunity to experience the dip for a long time.
It all depends on what you are comfortable that is why we are different and so have different preferences. Choosing to invest the total amount at once means that you have it as liquid cash at hand, in that case, I see nothing wrong with that because if you keep the money to be invested weekly, you might be tempted to use part of it for something else that is not Bitcoin, this being the major challenge of people especially in a festive period like this. To avoid such temptations, it is better to convert the funds to Bitcoin at ones and spend only the money budgeted for festivities without going beyond budget.

The DCA method of investing in Bitcoin is a great option for all but those who have predictive cashflow like salary will enjoy is so much because working out their discretionary income will be very easy and straightforward since they already know how much they will be getting at the end of the month or week as the case may be. Others with different kind of income sources can still use the DCA method but that will require some kind of calculations based on estimates which is still workable. Although, people that have such income source tend to go with lump some buying which is not also bad.

For sure, you are correct Odohu that the guys with straight-forward and regular income and expenses are going to have it way easier to establish how much BTC to buy on a regular basis, perhaps even weekly buys.

The guy with irregular income/expenses may well DCA into BTC small amounts each week, and may end up erroring on the low side to make sure that he does not make any mistakes, or maybe if he is really nervous, he might let the whole month float before he spends, which then he could invest whatever is available at the end of the month or he could spread whatever is available over the weeks of the subsequent month.. there are trade offs to any approach, and he may not even retain the exact same approach each week, yet if he is purposefully making sure to save and to develop systems for buying into bitcoin, he will likely get better at figuring out what kind of an approach is more suitable for his finances, his psychology and even his limitations in regards to figuring out short-term BTC price moves to the extent that such short term BTC price moves might affect the strategy he chooses to employ each month (or week).

I do agree, it's not like DCA is etch on stone, for small investors like the majority of us, we could used a tweak and see how it will fit on our budget. Maybe can can start small and make some adjustments based on our regular income. The key here is to be consistent, $10 or even $20 a month that wouldn't hurt your budget and see how it goes. For all you know, it will grow significantly over time due to compounding. So even with limited resources, you can still used this method each month or weeks and be as effective like those whales or institutions. Again, there is no secret here,  just focused on long-term growth, and DCA will be your friend.