⭐ Merited by MusaPk (1)
What you are comparing is Lump Sum vs DCA. To see which one is better we have to see historic prices of Bitcoin. I have done a little research on it previously and came up with conclusion that Lump Sum gives more profit over DCA in the long run. Of course for Lump Sum we need capital in hand which is not possible for everyone and those who don't have huge capital in hand can go for DCA.
Below is comparison of investing Lump Sum and DCA. If we start investing 126$ per week from Jan 24, 2018 to Jan 24, 2025 then after 7 seven years we have invested 46120$ and we have 3.39 Bitcoins in hand with ROI of +681.64%
On the other hand, investing 46.12k USD on 01/24/2018 would have given us 4.09 Bitcoin today with ROI of +841.57%
https://dcacryptocalculator.com/bitcoin
There is difference in profit and important thing to understand is that both strategies will give you profit in the long run. If you don't have huge capital even then you can get good profit by following DCA strategy.
Good explanation, it is a precise calculation and does not deviate at all. I agree with you that lump sum is a strategy for those who have extra money or in large amounts so that investors can act with a single purchase with the amount of money they have. Below is comparison of investing Lump Sum and DCA. If we start investing 126$ per week from Jan 24, 2018 to Jan 24, 2025 then after 7 seven years we have invested 46120$ and we have 3.39 Bitcoins in hand with ROI of +681.64%
On the other hand, investing 46.12k USD on 01/24/2018 would have given us 4.09 Bitcoin today with ROI of +841.57%
https://dcacryptocalculator.com/bitcoin
There is difference in profit and important thing to understand is that both strategies will give you profit in the long run. If you don't have huge capital even then you can get good profit by following DCA strategy.
DCA is suitable for the long term with net income after adjustments to living expenses or discretionary income. So the steps taken by investors with the DCA strategy will take a long time, either 5 years or 10 years.
But from what has been explained with detailed calculations, of course large money is better to use the Lump sum strategy, in addition to saving purchase fees, Lump sum also saves time but the determination of the execution price will fall at one price only.
However, with DCA we may spend a lot of fees on each purchase, but our entry will not be fixed at one price because the purchase spread lasts for a long time.
The benefits are not much different, but that is a good difference and may be a good choice to apply along with following up on purchases for the next 10 years.