Another important thing is that the investment is largely risk-free and you should invest the amount that you can afford to lose.
This statement from you is confusing.Bitcoin is not risk free.
The advise about investing an amount that you "can afford to lose" is advice given to show that the investment (including an investment in bitcoin) could go to zero, so when you invest, you are choosing to invest into bitcoin from extra money that you have, and you are aware that you could lose up to 100% of your investment amount.
If an investor does Bitcoin in this way he will be financially risk free that is what I meant. Investment is risk free from the point of view where one uses his money to the extent that he could have spent extra/discretionary income. We mostly know that the value of Bitcoin will never go to zero but as an investor we should be prepared to refrain from using all our assets in investments or not being overly emotional. Saving in proportion to income and accumulating Bitcoin for many years. Having a large amount of backup fund and not missing the bearish season Bitcoin lump sum event.
Many people after three cycles will call us "lucky" without thinking what mental insanity, STRESS, AND ANXIETY we HODLers have gone through. BUT, I will still tell them, "Yeah, I merely sort of got lucky".
There is quite a bit of truth that stress can come when we are in our earliest stages of BTC accumulation, and it can also come after we have been building a decently-sized investment portfolio. Even if someone, had gotten into 10x or 20x profits, but then if his BTC stash still drops 70% or more, then his level of profits are way less.. maybe 3x to 6x, but then at the same time, if he is still accumulating bitcoin, he can have dilemmas regarding how aggressively he should keep buying.
For sure, having a steady income might take away decent amounts of the stress, and also if bitcoin buyer (accumulator/investor) is still pretty young, then he likely realizes that he still has quite a bit of time to either keep building his bitcoin investment or to wait for it to appreciate in value (of course, with no guarantees, but still senses of confidence that he is allocating in reasonable ways depending on his personal specifics). So there can be dilemmas about keeping on buying bitcoin, even if a person might have built his bitcoin investment over 9 years with $10 per week or some modest amount, he well could have a lot of profits right now, but then feel that he might still need to continue investing into bitcoin, maybe at a higher level, such as $50 to $100 per week, even though the BTC is costing him way more than his earliest of BTC had cost, but he might recognize that he needs to be trying to figure out his stack size and to keep building it, rather than focusing on how much his stack is in profits, since he sees that he still does not have enough for his potential purpose of wanting to sustainably draw an income from his BTC stash.
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One thing about life is that when people sees you doing well in what ever you endeavors to do, they actually don't knows the pain and sacrifices made in other for such feat to be achieved, they think it's by luck or by chance, they actually don't know that behind that success, their is a lot of sleepless night, stay up late, disciplining yourself by depriving yourself of so many things so as to achieve your set goals, and most Bitcoin investors don't actually knows that holding without tempering with it is even more difficult than buying, but regardless of anything else, we that are at the forefront knows the scars and bruises behind our success, because nothing good comes easy.Then talking about risk, honestly no investment is risk free, but the risk attached to Bitcoin can easily be shrinked if an investor can hold for a very long period of time, because since Bitcoin is an asset that appreciate in value overtime, their is a higher probability that your financial status can change forever only if you can accumulate a very huge stash of it now and hold for like three to five circles.
You highlight a decently interesting point regarding how tempting it can become for people, especially poor people, to want to tap into their bitcoin investment, and they have to figure out some strategies to not tap into their BTC investment and perhaps either to just hold and to spend money from other resources, or perhaps even better to keep on buying bitcoin, yet one of the difficulties that poor people will have to keep buying bitcoin is that they end up with nearly 100% (or maybe 90% if we account for emergency funds and back up funds) of their wealth in bitcoin, and they start to reasonably consider that they might need to lessen their allocations to bitcoin.. so they have to figure out some kind of way to accomplish a feeling of not having all of their eggs in the bitcoin basket while perhaps also recognizing that they still need to keep stacking bitcoin.
If a guy ONLY has an income of $500 per month, and he had been stacking $10 per week of BTC for the past 9-ish years, and maybe he built his emergency funds and various back up funds up to more than 6 months of his income (such as more than $3k), then he might have had invested $4,700 into bitcoin and accumulated 1.3529 BTC... so he has so much more value in bitcoin as compared with other places..and he might be feeling a bit of a dilemma.
Even 1.3529 BTC has a spot price value of $130k and a 200-WMA value of nearly $60k, so there is some recognition that the BTC is approaching 10x the guys income, even accounting for bottom BTC prices (the 200-WMA). He might start to feel that he is getting close to enough BTC to live off of it to replace his current income in a sustainable manner.. but he also might want to make sure that he has some level of cushion, and he may also want to increase his standard of living, which likely would mean that he might have to continue to stack, especially if he is thinking about doubling or quadrupling his standard of living.. .. but his continuing to buy $10 of BTC per week is also not growing his BTC stack very fast, especially at today's BTC prices.
There is nothing wrong using the lump sum strategy if the money is there it won't trigger any financial stress if the income is available there are rich people who are using the lump sum strategy and also the DCA strategy poor people may also decide to lump sum if probably they won a lottery or unexpected huge amount of money came there way he or she may decide to lump sum without them selling there bitcoin holding since they will still be using the DCA strategy.
But it is better they use DCA than to buy at once even if the money is there. Bitcoin price always fluctuate and if we buy at once using a large money and the price is down a lot, we can be difficult to buy back Bitcoin. But if we can steady to use the same amount of money and allocate the money by our capability, that will help us to have the money and prepare for the next down time.I am quite aware that the DCA accumulating strategy is the best way to accumulate Bitcoin, but it makes no sense if you have like $1k that you are not going to need in a very long time, but your dca budget is like $100 weekly, instead of you to use it all the $1k to buy at once, you will Start splitting it bit by bit just to make it look as if you are DCAing, who are you trying to impress by doing that?
Do not forget that we are still in the early days of Bitcoin, so it's still very cheap compared to how much it might get up to in the future, so seizing any buying opportunity is the best accumulating strategy too me, once the funds is available, just buy, because now is the best time to buy, not later or tomorrow.
Many times people are employing DCA because they do not have lump sum amounts coming available to them. So DCA tends to allow them to buy as much BTC as they are able to buy every week (or whatever might be their buying periods). With a lump sum coming available, such as an extra $2k for someone who is already buying $100 every week, then he has the choice regarding how much of that extra $2k to buy right away as opposed to delaying buys with either DCA (delayed into the future) or buying on dips (delayed based on price dips that may or may not end up happening).
So yeah, of course, the guy with the $2k extra lump sum can choose to delay parts of his BTC buys into those two other categories, yet he still may have that $100 per week that he is already doing, so then he could choose to add to that DCA for a certain period of time with part of the $2k that he has. He also might consider how long has he already been buying BTC. If he is still in his first year of accumulating BTC, then he might choose to error on the side of just using most of the $2k to just buy right away rather than deferring any. He also might consider how he feels about BTC's short term price direction, and many times it can be quite difficult to figure out, but he might feel that there is some possibility for dips, so then he might have some comfort in setting some portion aside for buying at certain price dip intervals that might not end up happening. ... These are not easy choices, and surely a guy who had been buying bitcoin for a whole cycle or more may well decide differently from a guy who is brand new to bitcoin investing, yet it still might not be to his advantage to change his approach, since some guys prematurely consider that they have enough BTC (and they are sufficiently prepared for UP, when they are not).