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.
Good analysis and calculations HustleZ, You’re very practical in your learning nice attitude. This will further prove to some persons here who doubt the DCA method and think it’s not the best. You see that it provides you with more opportunities (some of your buys might fall into a dip period and you get to accumulate more)and you also get more profits.
Yes, there are many ways to reach our goals but it’s important to know and follow the best one, let this sink in.
Lump sum might have a period it’s a better strategy that is during the dips but DCA method is best everyday.