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......If your income is irregular like a contractor, freelancer, or small business owner, you simply work with percentages. Every time money comes in, you carve out a set portion for your Bitcoin fund before anything else.
As long as the amount that you are carving out is within your discretionary income, then no problem, yet it is probably better to make sure that you are accounting for your basic expenses first, before you carve out your bitcoin amount.
The timing and amount might vary, but the principle stays the same, that is keep topping up your discretionary allocation whenever you have inflow. Whether it is from a salary, a one iff project payment, or a business profit, the habit of setting something aside is what makes DCA work over the long term.
Sure. There is an importance towards prioritizing the bitcoin DCA that surely helps for the amounts to really start to add up over the passage of time... especially if one might be ongoingly DCAing for 1 or 2 cycles, he is likely going to really start to see results, and surely at some various points along the way, the guy may have to assess his level of aggressiveness in terms of his ongoing bitcoin accumulation and determine if he wants to tweak his level upwards or downwards or not..
What's the best time to actually buy the DIP and HODL, it's still confusing, this Bitcoin investment is a long time investment and any mistake from the beginning can cause wahala.
Trying to catch the exact bottom is where most people mess up, it is only clear in hindsight. A better approach is to define your own buy zones ahead of time based on your budget and risk tolerance. That way, you are not chasing emotions when the market moves. ..If Bitcoin drops 10%, 20%, or 30% from your last buy, you already know what to do because you planned for it. The key is consistency and building your position over time instead of going all in on one perfect entry....Also, remember that , long term holders dont obsess over catching the perfect price. They focus on stacking enough solid buys over time to build a strong average position and with that way you cut out the confusion and avoid unnecessary panics...
Guys who focus too much on price likely end up employing whimpy buying strategies because they end up being too busy waiting rather than ongoingly buying with persistency, consistency, and regularity.
What's the best time to actually buy the DIP and HODL, it's still confusing, this Bitcoin investment is a long time investment and any mistake from the beginning can cause wahala.
There is no best time to buy bitcoin and timing the market to buy at the dip is not a good strategy for a long term investor to use in accumulating bitcoin overtime. Bitcoin is volatile in nature making the price unpredictable and that's why nobody can time the market and know the excat time to buy bitcoin at the dip.
It's better that a new investor should buy bitcoin right away provided that he has his discretionary income and not upgrade from the no coiner zone to a lower coiner. It is better that he should keep his bitcoin investment ongoing, regularly, consistent and persistent through weekly DCA buying for 4-10 years and above with part of with his discretionary income that wouldn't put pressure on him. You will see that gradually your bitcoin portfolio is increasing overtime and in ten years time, you will be surprised at the size of your bitcoin portfolio.
If you are waiting for the dip before you buy bitcoin, you will be waiting in the ball park lost with no direction and missing many opportunities in the market that you are supposed to have used to build up your bitcoin portfolio to a certain level. The dip comes like a thief in the night and by then you might have used the money planned for bitcoin to do something else because you have been waiting and the dip isn't coming. DCA strategy gives you a better opportunity to buy at the bottom line of the dip that those waiting for the dip might miss.
It's better that you focus your bitcoin investment mindset towards the quantity of bitcoin that you want to accumulate at any given price rather than to focus more on buying bitcoin at a cheaper price because in the long run, you will end up with few quantity of bitcoin that you bought cheaper and it's the size of your bitcoin portfolio that will determine your profits in future.
I would think that it would be better to be a guy who had been accumulating bitcoin since 2017 with an average bitcoin cost of $18k
** and with 15 BTC ($270k invested) rather than a guy who only has 10 BTC and an average cost of $9k per coin ($90k invested). The second guy ended up investing way less and he has a way lower cost per BTC, yet the first guy ended up investing 3x more, and at the same time, he ended up with 50% more BTC than the more whimpy second guy. We could illustrate how these kinds of things happen to show that variations of this does end up happening with some guys getting distracted into other things or trying to time their buys rather than ongoingly buying bitcoin.
**By the way, when I looked at this DCA calculator website, I saw that a guy DCAing bitcoin for the past 8 years would have had achieved around a $13.5k average cost per BTC, so I might be being a bit unfair to the first guy to show him having costs of $18k per BTC. Admittedly both of the guys are in a decent position and the first guy's
15 bitcoin currently have a 200-WMA value of about $770k and a spot value of $1.8 million... which I think that the 200-WMA would allow him to withdraw perpetually at $77k per year.
The second guy's
10 BTC holdings has a 200-WMA value of $513k and a spot price valuation of nearly $1.2 million, so the second guy could withdraw at a rate of about $51.3k per year.
Which guy would you rather be?
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 takeSure the factors that you mentioned matter, yet you also seem to be downplaying age and health status.. and of course, age and health status likely tell us something about an investment timeline. Other guys mention passing on wealth as a goal, and surely I am not opposed to those factors, even though surely guys should be making sure that they are also sufficiently financially covered since sometimes it may not be good to pass on too much to heirs or at least there can be problems to have the heirs as a primary motive - even though people think differently about these kinds of matters.
Of course the devil of a lot of this is in the details, and if we are talking about investment rather than trading or gambling, we still should be approaching bitcoin with an intention of being in it for at least a 4-year timeline to be investing rather than to be trading and/or gambling. And, yeah, anyone can have something come up in their life that shortens their timeline, yet those issues might not have had been obvious at the time that the guy started in his bitcoin investment.. and yeah some folks might be unrealistic about their age and/or their health status.
Another measure to offset risk is by individually tailoring position size, and yeah of course, other aspects of finances matter in regards to income versus expenses and other investments that the guy might already have and/or what level of back up funds he might have.. these are all factors. Risk can be mitigated, and sometimes if there are perceptions of bitcoin's volatility or perceptions of what bitcoin might do as compared with other places that the value can be kept, then position size can help in addressing those kinds of matters too.
In general, whether it's starting a business or starting an investment portfolio - the earlie is ALWAYS better, and it's not my mere opinion. It's a FACT.
Plus it's not only because of the possibility of gaining more profit. It's also because starting early also makes you LEARN early, or make mistakes early so you could learn from them. Making a massive investment error in your 50s is more dangerous for your financial health than if you made it in your 20s.
Investing and holding investments are not the same thing. Everyone should think about how to hold them before investing in Bitcoin. I invested in Bitcoin for long-term storage, but for some reason I could not keep my Bitcoin anymore, in that case, it may not be possible to get the desired profit from Bitcoin. Therefore, money management of the money you earn before investing is very important.
For example, if I share my investment method with you, it is as follows-
Apart from investing in Bitcoin, I have five other investments in real life, from which I get profit from the three most reliable ones, I meet the basic needs of my family [the profit from there is enough to meet my basic needs]
With the profit from the fourth place, I add the capital of the five previously invested places that are fairly good. And with the profit I get from the fifth place, I have been investing in the DCA method.
And with the extra savings I have in the months when my expenses are a little lower, I have created a separate fund, with which I will probably aggressively buy Bitcoin during the DIP.
I would consider that if guys are drawing from any of their investment prior to reaching overaccumulation status, then they are likely engaging in trading rather than investing, even though various investments are supporting their expenses.
Of course, people do not need to work in order to earn income, yet if you are drawing from various investments and not depleting your principle, then you are engaging in sustainable withdraw, and from my perspective if a withdrawal system is really sustainable, then it should be able to go on perpetually at the same rate of withdrawal without depleting the principle.. In other words, the principle is maintaining its value so the withdrawal rate is less than the asset is appreciating.
Bitcoin is likely amongst the best, if not the best, place to reach sustainable withdrawal status, and surely I personally consider measuring the value of the bitcoin (and thus the sustainable withdrawal rate) from the 200-WMA value of the bitcoin, and it seems that traditional investments tend to ONLY allow around 4% annual sustainable withdrawal rate, yet bitcoin seems to allow something like a 10% sustainable withdrawal rate as long as we are measuring from the 200-WMA rather than measuring from spot prices.
While this is a fascinating theoretical framework, it's crucial to acknowledge the risks and assumptions:
: The "10% rule" is based on Bitcoin's past performance, which is no guarantee of future results. Bitcoin's growth rate may slow as the market matures.
: While a powerful tool, the 200-WMA is not an infallible support level. Bitcoin has, on rare occasions, dipped below it. A prolonged period below the 200-WMA could disrupt this strategy.
: Cashing out Bitcoin is a taxable event in most jurisdictions. Your sustainable withdrawal rate must account for capital gains taxes.
: This strategy assumes a certain level of discipline and the ability to adjust spending if the market enters a prolonged bear phase.
: Even with a smoothed-out average, Bitcoin's price swings are significant. This kind of plan is not for the faint of heart and requires a very high risk tolerance.
