It doesn't matter the how you chose to spend the money on bitcoin accumulation. Bitcoin investment methods made provisions for all of that, it depends on how you the investor want to go about it. If you want to go with the lump sum method it's fine, if you want to go with DCA it's also fine. It's just like someone who use the elevator and someone who uses the staircase. But in the end they are going to meet at same spot. The choice of what method to use is your own and nobody can make that decision for you. What matters is your ability to hold on to your bitcoin on the long term.
Thanks for your reply. But I think How you invest has an affect on your returns. I'll share a scenario with you and show how Lump sum and DCA differ.
CASE SETUPAmount to invest : $1200
Period: 12 months
Investment asset
Lump sumInvestor A puts $1200 in a stock at once in Month 1
Stock price at month 1 : $12
Shares bought = 1200÷12 = 100
At the End of year (month 12) price: $15
PROFIT:15×100 = $1500-1200 =$300
Profit = $300
DCAInvestor B invests $100 every month for 12 months.
Stock prices (Month 1 → 12): 12, 11, 10, 9, 8, 9, 10, 11, 12, 13, 14, 15.
(i asked chat gpt for random prices)
Now let's calculate shares purchased each month:
$100 ÷ 12 = 8.33 shares
$100 ÷ 11 = 9.09 shares
$100 ÷ 10 = 10 shares
$100 ÷ 9 = 11.11 shares
$100 ÷ 8 = 12.5 shares
$100 ÷ 9 = 11.11 shares
$100 ÷ 10 = 10 shares
$100 ÷ 11 = 9.09 shares
$100 ÷ 12 = 8.33 shares
$100 ÷ 13 = 7.69 shares
$100 ÷ 14 = 7.14 shares
$100 ÷ 15 = 6.67 shares
Total shares = ~111.16 shares
Final value = 111.16 × $15 = $1,667-1200=$467
Profit = $467
I was confused first but when I calculated DCA was alot better. You can also see yourself tha DCA is a lot better. You get an extra 11.16 shares if you invest using DCA. And Thanks for your reply that made calculate everything to give an answer to you and myself. Hope you also learned that both are not the same. Lumpsum is better if you want to capture a big move fast but DCA is better if you want to go long term.
Your examples are not bad,, yet you can have a variety of scenarios in terms of which way the BTC price might move in any particular period, and yeah of course, we don't know bitcoin price moves in advance, and newbies likely need to be erroring on the side of not watching price and largely getting a stake in bitcoin, depending on their other assets/investments, too.
If you have an income and you are already DCAing with a portion of that, such as $100 per week as I had given in my earlier example, then you have some money coming into bitcoin no matter what for however long you keep that set up and going.
If you have $5k to $10k, you could invest parts of it lump sum right away, yet even the parts that you would defer by DCA or by buying dips, you would set up the parameters, the amounts and the time, so the DCA could be over 5-6 weeks or it could be over 5-6 months or some other timeline, and if the BTC price generally trends down during the period of your DCA you are better off for deferring yet if the BTC price generally trends up during your period of DCAing you would have had been better off to buy right away with that portion. You cannot really know price direction with certainty, even though you could have some hunches that might end up being or not being correct.
Similar with the buying on dip, you can set the total amount that you will dedicate for buying on dip and then increments of dip needed for each and the quantity to buy for each dip, and sure you run the chance of the dip not happening and/or not happening to your expectations.. you could have a portion that buys $200 for every $2,500 price drop for 10x buy orders going down $25k (that would be $2k dedicated for that).. but then you might have regrets holding so much money to buy to dips that do not end up happening.
Besides also figuring out how much to put in your emergency funds, guys will sometimes also have dilemmas about holding back some amount for buying on dips, so maybe instead of buying $100 per week, you buy $75 per week and hold $25 per week for buying dips... but your $25 per week might build up quite a bit, yet you still have to figure out how much of a dip you need to use the dip buying money for buys.
There are trade offs for any of the techniques, and many of us have participating in this thread have concluded that it is better for newbies to error on the side of buying more and regularly rather than employing waiting techniques and as your bitcoin holdings grow, the size of your bitcoin holdings and also the strength of your cashflow management systems might help to inform you both in terms of changing your bitcoin buying/accumulating techniques and/or changing the level of your aggressiveness. Usually it is not good to come out aggressive because you might accidentally act too aggressively, yet the more experienced you are in cashflow management and investment might help to justify higher levels of aggressiveness without devolving into gambling behaviors.
If you really want to be a bitcoin investor then you should be striving to employ investing techniques not trading and/or gambling techniques.. and if your timeline is 4-10 years or longer, your persistence, prudence and ongoing buying is likely going to measure where you are at 10-ish years down the road rather than a few of your smaller investments along the way, even your first few buys (whether lump sum or DCA) since I would imagine that you would be ongoingly buying for several years , maybe 4-10 years or more of ongoing buying, rather than putting in all of your investment at one time and then just sitting on it... yet those are choices in regards to figuring out if you have some target level of how much you want to put in or how much you think is enough to have had put into bitcoin as compared with other places that you might put it.
I think you are right about what you said here concerning age, it plays an important role on how a Bitcoin investment should approach his investment, just as you have said already, you can't expect a 70year old Bitcoin investor still planning on holding for more than 10 years because he knows that he has a limited time, unlike those that are in their 20's.
But those in their 20's don't have to buy only the dip, they just have to buy anytime their discretionary income is available, but if their is a dip in the market they might seize the opportunity and buy aggressively if they have their reserves funds to do so, because they have quite a lot of time to reap from their investment when bitcoin has risen up to a million dollar or more.
No matter the age, it's still very wise to invest in Bitcoin regularly when you can and use market dips as a chance to buy more if you have extra funds set aside cos nobody knows how long they have. Someone in their 20's might not necessarily live longer than someone in their 70's. What really matters is the goal the person aims to achieve, his/her financial situation, and how much risk they are willing to take
No matter your age, you can still invest in Bitcoin because the market is always open to anyone who wants to do so. Even with retirement funds, you can properly make a plan to invest in Bitcoin, and people are getting wiser because they are taking advantage of every Bitcoin opportunity they get. If you are retiring, it is
even better to invest in Bitcoin and then use your pension as emergency funds, because it will help if you take things seriously. Since money will be coming in each month, planning is necessary. because your financial situation is so everything, because other people have more opportunities to invest.
Of course we can use various funds as our emergency funds, yet we still have to think in terms of the liquitity of such funds (how accessible are they) and the volatility of such funds... There is value in a certain amount of cash, such as maybe even a couple of months of physical cash, yet sometimes there could be big ticket expenses in which the money is needed immediately and other times there might be an ability to absorbe extra expenses over a few months, even though presumptively during some periods your expenses would be greater than your income. The more and more that we are building our wealth, then the more that we might have various emergency funds held in various assets, yet we still might not be able to get away without holding at least a couple of months of cash without unduly putting ourselves and/or our bitcoin at risk of being tapped into at a time that is not of our choosing...
and for sure, there is going to be variability based on how much wealth a person might be building and the extent to which he wants to keep some of that wealth outside of bitcoin and to potentially be serving more than one purpose. By the way pension funds are usually not available to cash into, even though other forms of retirement funds might be, but there could be penalties to use those kinds of funds as if they were emergency funds when they might not serve as well for immediate emergencies largely due to their accessibility... sometimes emergencies or short falls of cash, might only last for a few weeks or maybe a couple of months, like a car accident or your roof falling in.. and you might need the money right away in order to not lose more.. and if you don't have mommy or daddy to fall back on.. (or some other alternative way of getting money, including the use of debt), then you have to come up with the resources in a short period.
Even with the historical performance of bitcoin people are still wasting time to invest in bitcoin, people often give unnecessary excuses, for things they don’t fully understand.
To my understanding, I don't think many people are concerned about the risk factor of bitcoin, some are very aware that it has little to no risk compared to shitty coins but you'll still see them investing on shitty coins why? Lack of patience, It simply because they're more concerned about the time frame of holding, some can't wait to start profiing and taking their profits sooner than later.
To such people, they believe that shitty coins could give them quicker profits and won't mind whether it's more riskier than investing on Bitcoin but it mostly end with regrets cause shitty coins would always do shitty things and In return, drag them back to bitcoin investment and by then they would've missed out on several opportunities coupled with the time and money wasted on shitty coins.
All you have said is correct but I want to add that most new investors start with shitcoins reason being that shitcoins recruit people to shill their scheme on social media thereby attracting many people to buy their shitcoins at a promise of making exponential profits. This is how they get trapped by shitcoiners and they usually learn the hard way. I was a victim of that as I did not start with bitcoin but shitcoins that cost me money and pain. It was when I joined this forum I began to learn the right things to do and about bitcoin, the DCA method, the emergency fund concept and other great this that are helping me today. I just regard those mistakes a learning process and I try not to dwell in the regrets of the past but face the future with optimism because there is never a wrong time to start investing in bitcoin.
New investors that started their bitcoin career from this forum are indeed lucky because this place will equip them with the right information from the beginning thereby saving them time and money and enabling them meet their bitcoin accumulation goals earlier. The information available in this forum is all that is needed to achieve success in bitcoin investing, hence they should be taken seriously.
Let's say that you had an ability to invest $4k when you got started, and then another $100 per week, so maybe you got started in 2020 (two years before your forum registration) and you invested your $4k and your $100 per week into shitcoins, so after around two years, you had invested around $14k into shitcoins that could have had been invested into bitcoin, and maybe you were able to recover that and redirect that towards bitcoin in and around April 2022 after you registered on the forum.. .. . so you maybe you were not able to completely transition right away and transfer your shitcoins into bitcoin, but little by little you might have have redirected your funds into bitcoin and then maybe even figure out ways to increase your weekly investing to $200 per week - especially after building up your cashflow management and your back up systems and practices.
So in many senses there can be a lot of financial and psychological comfort to recognize yourself to be building on solid grounds and not on a bunch of marketing fluff that may or may not pump into the future in a way that allows you to get out prior to their rug pulling you or even some of those shitcoins and their projects will crash and crash and just continue to crash without really knowing if they might recover at some point.. and even their recoveries might not be built on anything other then their further nonsense pump that is not really based on anything meaningful.
Sometimes it can take a bit of time to transition into bitcoin and to truly remove that trading/gambling/shitcoining mentality with a meaningful commitment to bitcoin, and sure, I have not been opposed to guys continue to dabble in shitcoins, trading and/or gambling with some relatively small portion of their bitcoin holdings, such as no more than 10%, yet it can be a slippery slope to stay in shitcoins and/or trading in any kind of way, so sometimes it may well be a lot better to change your mentality and just say no to shitcoins/trading and focus exclusively on bitcoin.. maybe for at least a whole cycle or more before even considering shitcoining and/or trading, and surely many guys who focus on bitcoin for a whole cycle or more, they might not even have any further inclinations to shitcoin and/or to trade and/or to put their well earned (well built) stack of bitcoin at risk.. by diverting it into unnecessary extra risk-taking.