And talking about mentally readiness for price fluctuation for new investors, there is need to be investing smaller amounts of money that is being more conservative just as they will be gaining more confidence about the market experience most times is the best teacher.
Encouraging new investors to commit small amount of money to bitcoin at the beginning is not even necessary even though you might be making some sense on the basis that their emotions will not be engaged in the investment after all since the money is small. I think there are more important things to advise newbies such as developing the mindset of long-term investment without expecting to become rich the next day, which is the root cause of impatience and by extension, the problems most new investors encounter in bitcoin. If the mindset is right from the beginning, they will do better on the long run.
A good mindset is necessary to succeed in bitcoin investment but you also need to understand that when a newbie buys in lump sum they are at a higher chance of selling too early due to price fluctuations than why they DCA with the amounts from their discretionary funds after all bitcoin investment should be done with money we can afford to lose, building the mentality to invest for long term isn't always easy especially for newbies, it takes effort and it's even harder when they invest lump sum at a single go and then the price DIPs, a sense of loss will almost definitely set in for a newbie pushing them to want to sell when they should HODL
A situation where a newbie wants to sell his Bitcoin stash when the price isn't moving to the direction he intended shows he is a trader that is timing the market. He already has an objective to sell when the price appreciate a little to make cheaper gains and also to sells if the price starts fluctuating. Newbie with this mindset doesn't have the intention to Hodl because they lack confidence in Bitcoin. An investor who has confidence in the potential of Bitcoin can still invest in Bitcoin for the long term using any of this technique(Lump sum or DCA) to buy /accumulate bitcoin and Hodl. However accumulating bitcoin using DCA have a better advantage over lump sum but both techniques are good provided he has a discretional income for purchase.
Great point coz when a newbie starts thinking of selling just because the market didn’t move as expected, it clearly shows he wasn’t planning to hodl in the first place. That’s pure trading mentality, not investing and am guessing most of us has made that approach at one point before.......And sadly, most people who approach Bitcoin with that mindset often exit with regrets.
The real investor plays the long game, whether it’s lump sum or DCA doesn’t really matter much, so long as they are really consistent and using funds they can afford to lock away. DCA just makes it easier psychologically, especially during volatile times. You don’t need to guess the bottom because you can just keep stacking bit by bit......
Season of buying the dip and hodl is never over, we can adopt the use of one or two accumulation strategies such as DCA in buying to hodl upon every dip, this makes us to have the foresight ahead of what is expected, because we are already under a particular patter than can help meet up with the future demands in selling, base of the strategy adopted.
Then if we think we are not the good type that can know when exactly is the best time for an investment to be taken, then we may only have to wait and hold with our asset, till the market pump and be in our favour before we can sell, which is best approach for anyone to take and be more safe.
Yeah, buying the dip and holdling never really goes out of style, it’s kind of the classic move in Bitcoin. Using something like DCA just makes it easier to stay consistent without stressing too much about catching the perfect price. You’re basically building your stack quietly while everyone else is busy guessing.
And honestly, if you are not great at timing the market which most people are not used to, just buying and waiting it out till the next pump is a smart and safe play. No need to overcomplicate things. Sometimes, chilling and holding does more work than constant watching and tweaking.