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Everyone has from their discretionary income what they can realistically afford to invest on a weekly basis without breaking a sweat, for some it’s $50, for some $100 and for others it could be $200, now the idea is sticking and working with that, regardless of how little you might think it is, the idea is being consistent and maintaining a long term approach.
It seems that a lot of people have variation in their income too, and there may be periods in which they come across extra money that they can invest into bitcoin, or maybe they have periods in which their cashflow is tight and they are not able to put very much value into bitcoin. Being consistent may well be putting a priority on investing into bitcoin, yet the weekly amount does not necessarily need to be the same.
One of the reasons that we might describe a certain average cost per BTC historically (to back test) or to project into the future is in order to attempt to ball-parkedly describe some kind of a scenario in easy to digest terms, since of course if we describe how much a person actually ends up putting into bitcoin we might have a lot of variance from week to week, and maybe some weeks only have $10 invested into bitcoin and other weeks have $600 or more.. ..but there still might a bit of a preference to invest large portions of the discretionary income into bitcoin during the earliest of BTC accumulation phases, yet as the BTC accumulation might stack up, a person might decide to become a bit less aggressive. There surely is discretion in regards to how to treat their BTC accumulation, and guys might even end up making mistakes in terms of their choosing their own level of aggressiveness.
And after that, rather than looking at the possibility of achieving 1 whole BTC in a few or how long you feel it can take to accumulate 1 BTC, we should focus more on just how much we may be able to achieve in the next, 4 years, 6 years or even 10 years with what we have at our disposal. Even if your goal as an investor is to own 1 BTC in the future, the best approach still remains to break down the whole process into smaller goals, that way it’ll feel less overwhelming and more achievable and realistic. Additionally, when you hit those smaller targets and expectations, you’ll feel more motivated and each time you do so, you might just feel yourself closer to achieving your goal.
It seems that as we are learning about bitcoin, and as we might even be building our bitcoin accumulation systems, there may be a variety of ways that we are measuring our progress, and surely the more that we get into setting up systems to attempt to increase the aggressiveness of our BTC accumulation systems, we likely need to pay more attention, and their may well be some fun in terms of plotting out various scenarios in regards to where we expect to be, and then perhaps later to show the extent to which our projections ended up being correct.. whether we are looking 3-6 months down the road, 1 year, 3 years or some other longer timeline. Some new variables in our calculation of our goals might come into play, and sometimes some of our variables might disappear to cause changes in our assumptions about the realistic nature in regards to having certain kinds of sub-goals.
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Remember, a lot of investors have a shitty income, and they need to take care of their living expenses first before they will use their leftover money or discretionary income to accumulate bitcoin. If $10 is what remains after they have taken care of their living expenses and they decide to accumulate bitcoin with it, there's nothing wrong with their decision, and that is their level of aggressiveness at the moment, but they should work on their finances to be in a position where they can easily increase their accumulation money in the future. You don't know if the person using $10 to accumulate bitcoin has a weekly or monthly income, so telling the person to be accumulating bitcoin every week looks like you are putting pressure on him, and if he follows your advice, he is likely to invest in bitcoin in a way that he will not be able to sort out his daily expenses, which will give him no choice but to sell his bitcoin to survive.
Yep. Each of us is responsible for ourselves in terms of figuring out our level of aggressiveness, based on how much money we have coming in (and whether we can increase the money in order to be able to buy more bitcoin) and based on our expenses (whether any of them can be cut in order to increase the money we have to buy more bitcoin).
If someone spends beyond his discretionary income or makes mistakes in his calculations, then he is going to have to learn from those kinds of mistakes, including learning how to judge for himself rather than to rely upon the advice and/or pressures from others.
Sure, if we are pressuring someone to buy bitcoin or to increase their level of aggressiveness in buying bitcoin, and we don't really know all of their particulars, then we may well be giving bad advice, so we do have to be careful in regards to our sufficiently knowing another person's situation in order to help guide them, to the extent that we might want to get into their financial and/or psychological details (which may or may not be appropriate to be doing).
Some folks want advice and they want others to tell them what to do, yet even if we are helping another person, there is value in making sure that each person takes responsibility for his own BTC investment choices and the strategies that he chooses to follow.
My best idea would be to use discretionary funds to buy as much as possible using DCA, while also saving up for a DIP, This way when there is is a dip, the said persons are financially ready for it and can buy as aggressively as possible in order to accumulate more bitcoin faster, this should be done with a target period of around 4-10 years or even more.
I doubt that the best idea is to both DCA and to save some money for buying dips. Buying dips is more complicated than DCA.. so I doubt that you are necessarily (and automatically) making your DCA better by adding a buying the dip component. If you might outline what you mean exactly by buying the dip, then we might get some ideas of the trade-offs that you are choosing, which are not going to necessarily be trade offs that each guy is going to want to make, including that there are a variety of examples about how a person might supplement buying the dip with DCA.
Maybe you want to describe an example of what you mean when you say that you want to supplement DCA with buying the dip and describe how that is preferable to a more straight forward DCA approach?
^Buying Bitcoin with lump sum is the best strategy but the problem is not everyone can afford to dump at once which is why DCAing is very effective for accumulating Bitcoin even for the retailers. And also I wouldn't say selling at high is wrong because that's the basic of making profits by selling an asset while we can't really draw the line which is high and which is low due to the highly volatile nature so all we can do is just go with the instinct and try to make best out of it.
Every strategy in bitcoin investment is good for accumulating bitcoin, and if we must single out the best strategy for accumulating bitcoin, I think that should be the DCA strategy. The reason is that it has proven to be effective in accumulating bitcoin, and it has also helped so many investors who think that it's too late to invest in bitcoin to get started with their bitcoin investment, and they are consistently accumulating bitcoin either on a weekly or monthly basis. Since the lump sum strategy is mainly for rich folks, it can't be ranked as the best strategy for accumulating bitcoin because not all investors can use it to accumulate bitcoin.
If you come to bitcoin as a brand new bitcoin investor and you know that you are going to have right around $100 per week that you can start to buy $100 worth of bitcoin on a weekly basis based on your income and your expenses, yet you also might assess that you have around $2k that you have had saved up and that you can allocate towards investing into bitcoin. the person is not rich, yet the person has figured out that he has some extra money that he can invest into bitcoin, and with that extra money he can choose what he is going to do with that extra $2k. Maybe he considers himself a poor person, yet he can choose in regards to his extra $2k whether to: 1) buy right away, 2) set up BTC buys on dips (perhaps every time the BTC price drops $3k.. or perhaps every time that the BTC price drops 5% or some other chosen way of allocating that money - which may or may not end up with the purchase of BTC with that money) and/or 3) set up DCA buys over a period of time that is comfortable for him, perhaps over the next 3 weeks or over the next 3 months or some other period that he considers to be comfortable.
As you mention, DCA tends to be superior as an investment strategy since it allows the BTC investor to figure out how much BTC he wants to buy every week (or whatever other period that he is carrying out his BTC buys), and likely he will be tailoring his DCA buys in accordance with how much income he has coming in as well as considering his expenses as they are coming in and as they also might vary on a weekly/monthly basis... Some of his expenses might be fixed and other expenses might have capacities to be deferred. Some expenses might be mandatory and other expenses might have various levels of priority.
Since the lump sum strategy is mainly for rich folks, it can't be ranked as the best strategy for accumulating bitcoin because not all investors can use it to accumulate bitcoin.
I don't agree with you that the lump sum method is only for the rich because anyone can use that method depend on the prevailing circumstance. For instance, there are people that work on high see and spend anywhere between 3 to 6 months whenever they are on duty and when they are off duty they spend like a month or two on land and it varies accordingly. This type of people may be inclined towards buying using the lump sum method such that whenever they are on land where they have internet access, they can purchase with the amount they would have set aside for Bitcoin investment within the period they were on sea. This is just one instance because there are many instances that can make an average person use the lump sum method to invest in Bitcoin. Therefore, the lump sum method is not exclusively for the rich.
Every method is good and it depends entirely on individual preference to chose what method is ideal for him. So long as the basic ingredients of buying with discretionary income, holding for long term and ensuring emergency funds are kept are all in place, whichever entry method chosen is good. Just that the DCA seems to resonate with a lot of people due to its advantages.
Another example could be a guy who considers himself poor, maybe he makes somewhere in the ballpark of $6k per year (maybe getting paid $120 per week or $240 every two weeks), and he is investing into bitcoin at about $30 per week, so after a year, he would have had invested around $1,500 into bitcoin, which is 25% of his income.. which surely is a large amount, and it is also through the use of DCA. Yet, even this relatively poor guy might have an opportunity to consider lump sum, since he might have some instance in which he receives some extra money, such as he gets an extra $1k, which is 2/3 of the size of his total BTC investment amount for the year. With that extra amount, the guy can consider what to do in regards to BTC buys and even categorize his options in terms of 1) lump sum, 2) buying dips and/or 3) DCA. Surely he can also consider if his emergency funds and/or his back up funds are enough, yet if we assume that he is able to allocate all of the $1k towards bitcoin buying, then we assume that his finances are otherwise in good order, which surely is not always the case with poor people yet they can strive towards the building of systems to improve their cashflow management and their overall finances and psychology, even if they are relatively poor - and hopefully working themselves towards becoming less and less poor.. .yet still likely having needs to figure out ways to increase their income and/or cut their expenses (and expenses might not be in a good place to cut further).
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Lump sum strategy is also very good if used for people who have a lot of discretionary money to invest in bitcoin. So for people like that, lump sum strategy can be used. Because when buying, there are not a few rich people who can buy 2 to 10 bitcoins at once.
You don't need to have the ability to buy 2 bitcoins at once in order to use lump sum strategy.
If a person has a regular DCA of $100 per week, if he gets an extra $500, he could consider lump sum strategy for that extra amount, or he could consider buying under any of the three buying strategies, 1) right away, 2) dca, and/or 3) buy dips.
But for people who do not have a large discretionary income, the DCA strategy is the right choice.
DCA works for everyone, whether they have a large discretionary income or not.
Because this DCA strategy can be likened to saving money, but saving money in bitcoin. That is why the DCA strategy is very good for people who have a discretionary income that is not too large. So to invest in bitcoin there are several strategies that can be used, and in my opinion all of these purchasing strategies are very good. Because each purchasing strategy is useful for different conditions. So when you are going to invest in bitcoin, just choose which strategy you want to use. But the point is to choose one that suits our financial situation.
None of us is locked into our choice, and even if we might be DCAing weekly, we still might have occasions in which our discretionary income increases by receiving extra money, or maybe by decreasing some of our expenses. So our changes in our cashflow might temporarily contribut to our changing some of our bitcoin buying tactics.
In lump sum, you cannot have the money to buy regularly, you will keep on waiting and piling up the funds for it to get to a certain amount before buying which is not good for a new investor. Likewise, it's not good for any investor to keep more of cash with him instead of channeling it into bitcoin.
You seem to be mixing up buying the dip with lump sum. I doubt that there is any kind of need for the lump sum money to be piling up for any particular purpose, except sure, maybe you were saving up to buy a new car, and then after a year of saving up, you were either able to find a car way less expensive than expected, or maybe you were gifted a car from a relative... or some other scenario that causes your extra money to come available for other purposes, including but not limited to the possibility of investing that amount into bitcoin.
There are several kinds of situations in which a lump sum amount might come available for bitcoin, yet it was not specifically being saved for bitcoin. It also could be the case that money is being saved for something, and we know that bitcoin is a possible back up way of using such saved up money, so back up funds and even saved money can serve several purposes, yet when it ends up being used (in whole or perhaps only in part?) then at that point it gets specified in regards to its use.
Some beginners do not have any idea on Bitcoin investment or any strategy they can use to accumulate Bitcoin in to their portfolio during the month but they still choose to get started cause they believe that the earlier they start investing on Bitcoin the earlier they also get knowledge about Bitcoin and the kind of strategy they could use to keep on accumulating more Bitcoin. However at first they may think to invest little amount but as time goes and they begin to understand the process of Bitcoin investment, they might decide to increase the amount they are investing on Bitcoin (many from $10 to $50 weekly). Weekly Bitcoin investment is kind of better than monthly investment but it depends if the investor is getting money every week.
This is why in most cases is always advised that you understand and study about the Dynamics on how the market works before you start your BTC investment journey, because hence you understand how to strategize your accumulation, any decision that will be taken will be an informed decision. A beginner is supposed to study the market carefully before knowing the strategy he/she is to use that will best suit him/her because you don't test the depth of a river with your two feet.
A beginner should first of all look at his/her income before choosing a strategy, so that by the time you start your accumulation, you won't find difficulties on how to be persistent.
Hopefully, you are not overly delaying in your getting started into bitcoin, Spaceman1000$. To me, one of the most important things is to get started, and sure, you can choose your position size based on how organized you are and the extent to which you are able to verify the availability of discretionary income, yet getting started is a very important first step, from my perspective.
In other words, I presume that everyone already has some basic idea about whether they have discretionary income or not.. If they have concluded that they have discretionary income, then they can start investing into bitcoin. They can work out their details about how much and how they go about investing into bitcoin as they go. There is no need to waste a bunch of time figuring out things that they likely already know. Do they have discretionary income or not... if so, get started buying bitcoin right away, even if it is ONLY $10 per week while working out other details about finances and/or psychology.
Now if the person (presumptively newbie) knows that they do not have discretionary income or they are so fucking disorganized as to be unable to figure out whether they have discretionary income or not, then they have to first verify that they have discretionary income before they can use such money that they have to buy bitcoin.
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I don’t see reason that beginners need to study about the Bitcoin market before they start their bitcoin investment journey ,It is not necessary to study any market. All beginners need is basic knowledge of buying Bitcoin and the best wallet they can use to store their Bitcoin.
A beginner to bitcoin does not need to learn about bitcoin wallets before starting to invest into bitcoin.
As beginners, I don’t think they need to look for other strategies besides doing DCA (dollar-cost averaging) unless they have a large amount of money they want to invest. However, even if they have a significant amount of money, I would advise them to start with a small amount and apply the DCA method.
Starting small tends to be a good way to both prioritize getting started but at the same time trying to make sure that the newbie is attempting to tailor his level of aggressiveness to his knowledge level and/or to the organization of his finances and/or psychology - and it seems problematic for any newbie to start out aggressively investing into bitcoin, unless he already has decent organizational skills and finances, which generally would not be very common of a situation.