Hi JJG. I wanted to ask a question according the acummulation of Bitcoin and this thread is I think the best for that. I wanted to ask tha We should invest Big amounts of Money at a big dump for example $5000-10000 or we should break down this amount and DCA it over the course of a few years. I believe investing it at once is a riskier choice but can give you more profit than DCA. But DCA is Not Very Risky and requires Time and Discipline. What would you say a person should choose if they want to Increase The value of their money The Most. Thanks
Although this question is addressed to JJG, I will also answer your question. I think the answer is quite simple: if you truly have $5,000 or more, and that money is strictly discretionary funds, I don't think you need to worry about starting to invest in Bitcoin.
There are only two options, in my opinion: aggressive buying or using the DCA technique. I believe both options have their advantages, so the point is, don't be afraid of making the wrong choice. So, if you choose to aggressively buy Bitcoin, I think that's fine right now. As long as you truly plan to invest in Bitcoin for more than 10 years, I don't think aggressive buying now is a problem.
Because in 10 years, the price of Bitcoin will likely be much higher than it is now. So, with that in mind, I think it's safe to aggressively buy Bitcoin now. But if you want to be more relaxed and want to invest by buying Bitcoin at various prices, I think DCA is the right path. Essentially, you just have to choose between the two options. And I also remind you, if your funds aren't entirely discretionary, you should separate the non-discretionary funds. So, don't let that money get mixed up in Bitcoin, as that's certainly not good for your Bitcoin investment.
HustleZ gives an example of $5k to $10k so he was not exactly precise, since it makes a pretty big difference if the amount is $5k versus $10k. It also might make a difference to tell a few more things about the investor, such as some guidelines in regards to his
9 individual factors.If HustleZ is describing the amount as being available for bitcoin investment, then the presumption would be that the amount is discretionary funds, even though it would be nice to know more things about ths hypothetical guy.
Regarding your "only" two methods, you failed/refused to mention buying the dip. Do you think that buying the dip is not an option? Of course, we might not agree with the employment of "buying the dip" as an option, yet it seems to be purposefully ignoring a whole category and a whole other approach to fail/refuse to mention buying the dip as one of three possibilities.
I would call them 1) buy right away, 2) defer by time (DCA) and 3) defer by price (buy the dip).
The level of "aggressiveness" can fit into any of the three categories .. since in any way that we approach bitcoin we can approach it on scale of whimpy to aggressive and those approaches depend on context... so for example, if the amount is $7.5k (let's pick an amount in the middle of the range), and he chooses to DCA, he could DCA relatively aggressively $1,071.43 per day for 7 days or he could DCA relatively whimpily $468.75 per quarter for the next 4 years. We always retain the ability to be aggressive or whimpy and we can change our level of whimpiness or aggressiveness whenever we like.
Of course, buying Bitcoin when the price drops is very profitable. But I didn't include it in a category because I don't want someone just starting out investing in Bitcoin to wait for the price to drop before making a purchase. If they wait for the price to drop to a relatively low level, I think it's fine. But it would be problematic if they waited for Bitcoin to drop to tens of thousands of dollars before making a purchase. As we know, the potential for Bitcoin to drop to tens of thousands is very small. So I don't want anyone to wait too long for something uncertain when investing in Bitcoin. But again, I emphasize that if HustleZ waits for a relatively low price drop, he could still be waiting to make a purchase. So, basically, we don't know what his plans are if he chooses to buy Bitcoin during a price drop. Therefore, I didn't include buying during a drop in the category because I'm afraid he'll wait for the price to drop significantly, which would be a waste of his time.