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.
Of course I have always fancied the DCA method over lump sum method. Because the DCA method gives you an opportunity to get bitcoin at different prices. Even if an investor bought his initial bitcoin with lump sum, he/she should follow it up with DCA method subsequently. Such an investor shouldn't just buy once with the lump sum throughout his accumulation/holding period. Am a big fan of the DCA approach, and it
's is what I practice.