Dollar Cost Averaging (DCA) helps you deal with uncertainty, and since most people who are new to the area have uncertainty, I think it makes sense. As with bitcoin and other cryptos with the previous 10 years and a lot of doubt or uncertainty that actually doing DCA was the right choice, and we have to learn from the past and also do research or analysis with existing as well as future developments because this will helps our belief in bitcoin.
Doing DCA on bitcoins is a very smart choice and applicable to those who have limited cash issues and vice versa, especially I have limited finances and I do DCA every month in small amounts and will increase when I have more cash. And whatever the price of bitcoin, I will continue to do so until I am completely satisfied with the price, which I think is very high.
and most importantly, in the next 10 years I may be old enough that my income may be limited due to some factors, so I did a very long DCA to guarantee my and my children's old age. And I will also educate them to manage their finances well and introduce bitcoin at the right time.
Since 2019 when I began to learn about Bitcoin, I usually only thought that investing in Bitcoin was just throwing all the money you want to invest into buying the fraction you want, but I was totally wrong for about 4 years. The first place I heard the abbreviation "DCA" and understood what it really meant was in these forums. I also believe there are people like me who don't know about the DCA strategy, and I think it is good to let the people around us who are into bitcoin know about the strategy too.
This strategy has really worked for me since I became aware of it, and a few of my friends whom I told about it also appreciated the strategy.
Even the DCA strategy can make someone earn more profit.
Many regular people do not even really know very much about investing and/or cashflow management techniques, and so any of us who start to practice with trying to save and really building an investment portfolio will likely become more inspired to figure out various strategies to attempt to improve our cashflow management and therefore our investments and our building of wealth.
Another thing is that a lot of people do not really know how to invest, so they might ONLY invest into a business or into property.. and then sometimes they might end up having some program through an employer or be led to a financial consultant, and even as they might build their wealth, they might be lead down bad paths or have difficulties discerning better information as compared from worse information, including that many people might not even realize what is the difference between investing and gambling so the concepts kind of merge together in their head... and surely the more that we practice various techniques without getting reckt, and therefore we try to learn how to employ risk management techniques, wealth building and preservation, then as we practice and grow our investments, then we will likely learn the various techniques that differ in terms of whether we are in "accumulation" stages, maintenance stages and liquidation stages, and if we realize that it tends to take quite a long time to move from accumulation stage to liquidation stage, then we may also realize that DCA is amongst the best of techniques to achieve a lot of our wealth building goals while we are attempting to learn more along the way.. and even DCA makes it likely that we won't reck ourselves, but we could still end up investing more whimpily than we should be cause we have not necessarily realized some of the values of living within our means to spend less than we make in order that we still have a budget that we are able to invest... including making sure that we have an emergency fund, too.
Of course there are people out there who get too greedy for their own good.. .. and sometimes they can still profit from their efforts, yet historically, we have seen a lot of those kinds of guys waiting around too much for lower prices, not acting and even selling too much too soon.. or like you said the other extreme is buying when the price goes up rather than buying when the price goes down or just buying regularly no matter what is the price.
So there are a lot of weird perspectives, and the main thing seems to be that we try to create systems for ourselves that we have decent confidence are solid, and we cannot necessarily expect that others are going to follow our methods or that they will be able to figure out some kind of a meaningful long term BTC accumulation strategy for themselves.. even if it might vary from our own..
Yes, there are many different perspectives and approaches when it comes to investing and accumulating Bitcoin. Every body has his own goals, risk tolerance and strategies, so what works for one person many not work for another one. it is very important to develop your own plan that fits your circumstances, and stick to it, rather than constantly chasing market trends and copying others.
In my opinion, the most effective strategy in view of long term potential of Bitcoin would be to consistently acquire Bitcoin during significant downtrends, and wait for the bull cycle to realize your profits if you choose to do so.
I agree with the vast majority of what you said in this post Sayeds56, except I believe that it is a better practice to take quite a bit of care in terms of making sure that we do not get too excited in terms of selling BTC on the way up whether we believe that there is a bull cycle or merely we are trying to time various waves in BTC's price movements.. and it can take 20-40 years to really build up an investment portfolio, and sometimes people might get 2x-5x price appreciation in their BTC or whatever and then end up selling too much too soon and consider themselves to be smarter than everyone else and end up getting left behind because they sold too much too soon.
Yeah, there are individualized ways to figure out these kinds of selling on the way up tolerances, but at the same time, there may also be some needs to appreciate some of the fundamentals of bitcoin in terms of refraining from strategies that try to sell too much too soon.. even if a 50% to 80% correction might end up happening.
I know that it can feel painful to go through 50% to 80% corrections, but there are also ways to attempt to prepare for that kind of downward volatility without fucking around too much with selling too much BTC prior to getting into some kind of an over-accumulation status or even something close to fuck you status. We are going to come to differing conclusions, including even having differing views about how to assess our own circumstances... with the factors of: cashflow, how much bitcoin we have already accumulated, our other investments, our view of bitcoin as compared with other investments, timeline, risk tolerance, and our time, skills, goals (investment/lifestyle targets) and our abilities to strategize, plan, research and learn along the way including tweaking strategies from time to time to consider trading, reallocating, use of leverage and/or financial instruments.
Outside of practicing and learning along the way, it can take a while to figure out these various factors and even how they apply to our own financial/psychological circumstances and how they can change along the way and how we can continue to learn in the process.
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I agree with you. Those who expect long-term profits from Bitcoin will be successful in Bitcoin investment. I have seen some investors Those who could not trust Bitcoin. They sold their bitcoins with loss due to a little bit of negative news and this incident could be October or November 2020. But while Bitcoin was slowly trending upward, one of them was thinking that if Bitcoin came back into their buying range, they would immediately hold it. But unfortunately Bitcoin turned bullish since then and it rose to around $69000.
They had a good opportunities but they couldn't take it. It was their fault. The market is still in the deep and those who are smart must be holding bitcoins as much as they can.
Yep.. this is another aspect of the selling too much too soon, and not realizing the value of the asset in which they are investing (in this case BTC's value).
There are a variety of ways to engage in tactics that help from selling too much too soon, but a lot of it is easier said than done.. because it becomes so tempting to sell a very volatile asset (such as BTC) even when it might ONLY have 50% profits, because there is nervousness, and frequently there can also be a lot of hesitancy to buy back and waiting for prices to dip, when they may not end up dipping.
So strategies to continue to buy should attempt to both account for up and down volatility and also account for better odds to NOT get so wrapped up in short term BTC price volatility, continue to buy and consider the investment to be a 4-10 years or longer investment, and sometimes even more than 10 year timeline is necessary in order to improve psychology.. and of course there are also no guarantees that BTC prices will continue to rise, but seems that BTC upside asymmetric nature continues to be good so that if people are investing modest amounts, then there are likely decent chances that they will be in profits 4-10 years or longer down the road, and perhaps even in better profits than any other investments that they could have made... and then sometimes, at the same time, there can be questions about how modest or aggressive a BTC investor should be? My own personal philosophy has been to attempt to be relatively aggressive, even though I understand that sometimes people will overdo it, even when they believe that they are being "relatively aggressive" they have not sufficiently prepared for emergency funds and various cashflow crunches that they may suffer from time to time along their journies in life.
