[edited out]
I'm sorry there's no best accumulation strategy, every investor employs a strategy that suits him and his finances, and/or his level in his accumulation journey. There are three accumulation strategies
All the are valid accumulation strategies. Now talking about strategy that create the best long-term potential, all of them does that if employed properly. For example, an that have high discretionary income and lump summed and bought 3BTC when Bitcoin was $16k spent only $48k, if that was his accumulation target, his investment is now worth 252k+, and that's more than 5x, the value could be more on the long-run which makes his investment have long-term potential.
Your example is very unrealistic, since an overwhelming majority of folks do not lump sum invest into bitcoin at the bottom of a price cycle. Sure, it could happen, but it is a fantasy.
Another thing is that even if a person might have something like $48k to lump sum buy into bitcoin, they usually are going to be better off (both financially and psychologically) to both lump sum and to supplement their lump sum with ongoing DCA buying.. especially if they are new to bitcoin.
Many folks have fantasies about buying bottoms and then they are also fantasizing in regards to what point they are going to want to cash out, so they have troubles becoming a long term investor rather than becoming overly focused on their level of profits. and their supposedly fantasy buy (as the one that you are fantasizing about).
Bitcoin remains a great investment to consistently and ongoingly invest into for a cycle or two or more, and then to figure out options along the way, so I tend to consider that anyone making merely one lump sum buy into bitcoin or maybe he buys in and then he is timing potential dips. Such guy is likely not very serious about bitcoin, and he is merely thinking about how to turn over his investment rather than to stay into the investment in a sustainable kind of a way.
DCA is for those who don't have much discretionary income available and also those who wants to invest periodically to smoothen the effect of volatility on their investments. If followed consistently, you would still achieve good success with reference to your accumulation target, although it would take a longer time. This still has great potentials in the long-run.
I agree that if you already were to have the lump sum available, such as having $48k, then it would not make a whole lot of sense to spread it out through DCA, even though it does make sense to consider such $48k in terms of all three categories, and if the guy with DCA is able to take $300 or more per week from his regular salary to supplement his decision about what he is going to do with his initial $48k, then surely he should account for whatever might happen to be his anticipated income in the coming months, too.
Buying the dip is an opportunity to accumulate Bitcoin at lower prices, it's a good strategy to get more quantity, although waiting for the dip only is a bad strategy for people who have not accumulated much Bitcoin and those who are yet to start their accumulation journey as that may mean gambling on Bitcoin price rather than being a committed investor and many of such gamblers may end up not investing at all if their anticipated dip does not show up.
I would have thought that if your hypothetical guy had $48k available in late 2022, then he would have had considered allocating some of that for buying the dips. Late 2022 was such an uncertain time in bitcoin, so it seems quite unlikely that anyone would have had realistically invested his whole wadd of cash, such as $48k, into bitcoin at one time, even if he had such $48k available as a bitcoin newbie.
DCA is for those who don't have much discretionary income available
Says who?
Who told you that DCA accumulating strategy is only being used by low income earners or a low coiner?
The DCA accumulating strategy can be used by anyone, it's not tied up to a certain set's of people, the earlier you understand that the better.
Perhaps if you were not so fast to correct an impression or at least have taken time to read with understanding, you would've observed the meaning in the second part of my sentence quoted below
DCA is for those who don't have much discretionary income available and also those who wants to invest periodically to smoothen the effect of volatility on their investments
There was a second condition there which includes those with much discretionary income available, but wish to smoothen the effect of Bitcoin volatility on their in investment.
DCA has this unique feature that it accommodate everybody with various quantities of discretionary income and allows slow and steady approach to acquisition of Bitcoin. More like spreading what you could've bought once across a longer period of time to achieve it. Taking reference from my example above, you'll see that the guy that lump summed and got 3BTC can never be compared in profits to the other guy buying $100 weekly from early 2023 when Bitcoin was $16k until now. The guy who bought with lump sum is leading, which makes the accumulation strategy very much valid.
There's no accumulation process that's more effective than the other when employed correctly, the goal is to buy more Bitcoin and enlarge your portfolio and most importantly having a long-term holding plan.
Of course, lump sum buying the dip is going to do better than DCA, especially if a person might already have a lump sum that is already available. Most people are not in such a situation, yet if they find them in such a position of having a lump sum and the BTC price had already dipped considerably, then they may well be better off to use most if not all of the money for buying BTC right away rather than allocating towards either DCA or buying the dip (that might not come). Yet, when we are in the middle of a dip, we frequently cannot know the extent tot which the dip is already over. Sure, sometimes it becomes somewhat clear that the dip is over or nearing its bottom.
You me or any investor who intentionally pretends to wait for the dip season is his not an long terms investor but just a gambler just as you have said waiting for the dip can indicate lack of commitment to consistent accumulation, relying on the prediction an waiting for the market downturn can lead to speculate and gambling rather than informed investing from long term investors sticking to consistent accumulation plan,regardless the market downturn helps you to be consistent and discipline.
I think you are being too emotional about this because I don't see how buying the dip amount to gambling. Do you even know what gambling is? Where is the risk of losing money in buying the dip that will make it the same as gambling? We I will give you a little history about my personal experience.
There was a time Bitcoin was stocked in a range popularly called "don't wake me up" then and the average price was around $26k. They we knew that there would be a major move but what was not clear was if there will be a dump before the major move or it will continue rising from that range so what many people did that time was to set buy orders at lower prices like $20k, $18k, $16k and so on base on individual choices. Lo and behold, the price dropped to below $18k towards $16k before it quickly reversed and started rising and got to $29k and upward. Those who succeeded in setting these limit orders were waiting for the dip and they got their orders filled. That is not gambling because assuming the price did not dump and continue to rise, they would have till used the same funds to buy, just that they will be buying a little higher which is not still a bad idea. I am not saying that you have to adopt this method, stick with the DCA method that is easy but don't call buying the dip gambling because even now there are people who have even kept like 10% of their investment money incase Bitcoin get to $74k. They are buying with the DCA method but that does not mean that when price drops they will not take advantage of it.
I think what he meant when he referred to buying the dip as gambling is waiting for the dip to happen before buying that's the major gamble, maybe he didn't state it clear to your understanding or you didn't understand him, buying the dip method is not wrong but what's wrong is waiting for the dip before one starts investing on Bitcoin, it's like gambling cause what if it goes the other way round and Bitcoin didn't dip as expected but pumped rather.
Perhaps I have a different understanding of what gambling is with respect to what you guys are saying. I understand gambling from the angle of the risk of losing money or taking unnecessary risk such as venturing into trading without being prepared or maybe you hear from friends that traders makes lots of money. These are the things I consider as gambling... the risk of losing your money is always there. You have not been able to convince me that using 10% of my investment funds to set buy limits at lower prices is gambling when I have 90% of the funds to use for the DCA method. I use hybrid system because I aim to make optimal use of every opportunity the market can offer to me and since I know that the price does not continue in one direction forever. So, setting limit orders at lower prices while continuing to DCA does not in anyway seem like gambling for me.
10% being held back for buying dips seems more than reasonable, as long as you realize there are chances that the BTC price won't go down. I can even consider holding back higher amounts and still not being unreasonable or overly taking risks of the BTC price going up rather than down.
This is why i say people should understand the concept of what you are investing in first before investing in bitcoin, investing in bitcoin is a long term strategy not an problem solution solver used for financial crises that is why is it advisable before you start investing in bitcoin you need to be financial stabilable first in other to avoid exacerbating financial difficulties, when investing in bitcoin when have any financial crises the first thing that comes to your is to sell part of you accumulated assets which is not advisable to do.
One must not be very financially stable before investing in bitcoin. As long as you have a certain amount you can let go of for some time ( which we always do) you can invest in bitcoin.
For a financially stable investor, you need to invest using the DCA strategy and always reserve a higher amount to buy during dips.( Buy more during dips -DCA + DIP). Don't always rush to sell, but selling a little fraction during boom and buying even more during dips is not a bad idea. Bitcoin is for the future and this future is not as far away as many think.
Your approach is mixed up and can and land someone in trouble if care is not taken. To invest in Bitcoin, you need to use only your discretionary income so that you will not feel any form of pressure to sell when you are not prepared to do that. Why will you be selling your Bitcoin when you see upward surge with the hope of buying back? That is not a perfect approach to me because you might end up entering into problem such as using the money for something else. I will always support buying and holing for long with no immediate plans to sell so that your mind will not be too fixed on selling.
It is true that Megaboss12's system sounds problematic, since there may well be a lot of times that he is selling too much too soon, and then other times in which he is failing/refusing to buy when he should be buying.
Sure, guys make these kinds of choices in regards to believing that they are smarter than everyone else on a fairly regular basis, and there may be times that there performance will outperform a strict and straight-forward DCA approach. .. and it is difficult to measure prospectively into the future rather than looking at historically how bitcoin performed and perhaps projecting performance based on historical performances.
Bitcoin has been such a great investment that it has been fairly risky to engaging in selling behaviors prior to reaching a status of overaccumulation, so it is difficult to imagine vary many situations in which Megaboss12's will end up outperforming a more focused approach that emphasizes persistent, consistent, ongoing, regular and perhaps even aggressive buying of bitcoin.
[edited out]
An investor who has stack more bitcoin or has been consistently buying bitcoin for the past 4years or more or may be has reach his bitcoin accumulation level or target may choose or decide to sell little percentage of his bitcoin and still continue to buy more using the DCA strategy but this process is not applicable to investors who just started buying bitcoin of recent if he buys and sell then is not investment but trading, a newly investor should see bitcoin investment as a long time investment because buying and selling is never the right way to go into bitcoin investment for it is better you have a zeal of Investing for a longer time and not selling any of your bitcoin for you can be buying bitcoin with the dca method for 4-10 either weekly or monthly and hodl.
Yep. It is difficult to imagine situations in which a beginner in his first whole bitcoin cycle would not end up either employing whimpy and unfocused strategies, including sometimes selling out of one hand and buying back out of the other hand, so incurring extra trading fees for nothing...
But, yeah, guys can do what they like, even dumb things, when they think that they are being smarter than everyone else.. which may not end up panning out in ways that they expect, theoretically, especially when bitcoin is already such a great investment, why fuck around with trying to trade it or to outsmart it? and then just end up wasting a lot of time, focus and energies when you would have had been better off to focus on ongoing buying at least for a cycle or a cycle and a half or more?
Another thing is that even if guys are close to reaching their accumulation status or maybe they have overaccumulated, these guys still might not be employing systems to sell bitcoin in order to buy back more cheaper, even if they might choose to start to sell some of their bitcoin as the BTC price goes up.