Being reluctant about emergency funds as a Bitcoin investor has it's consequences, which is why no investor should ignore it, emergency funds is not something to joke with as you're  a long-term investor, cause it is the protective measure that should be embark upon by every Bitcoin investor.

For me, any Bitcoin investor, I mean someone that is investing for a long-term, that have not started creating emergency funds, is just joking because, an investment like Bitcoin without such separate funds that we can rely on to Carter for your emergency needs, will definitely lead you into withdrawing from your hodlings, which might mark the end of your Bitcoin accumulation.

Instead of looking at the price of Bitcoin, you should buy as much as you can afford. The main thing is to decide based on your financial situation. First, you need to set aside necessary expenses and emergency funds. Then, the money that is really left as discretionary income should be used to make Bitcoin DCA.

The idea of dividing 1/3 that you showed may be a good budgeting framework or example, but it is not right to consider it a fixed rule for everyone. Because some people may already have enough emergency funds, while others may not have them at all. So the percentage that goes into BTC should depend on the person's income, responsibilities, backup fund, and ability to take risks.

If you want person to be accumulating Bitcoin before it reaches high point, then what happens when the price eventually reaches that high price, what then do you want them to do, should they stop investing or what?  There is no difference between telling someone to time the market and then telling the same people to get Bitcoin before it reaches a certain level because that two situations still needs the person to time the market.

When you do DCa, then you mind should be all about ongoingly investing, no matter whether the price is low or high. As a matter of fact, the thing about DCa is that you can even invest when the price are high same as when it is low. There is just no reason to begin investing an amount that is more than what you can afforded just because you want to get bitcoin before the price go high.

This argument has been going around the last few pages, so instead of adding another opinion I ran a quick backtest to see what the numbers actually say.

What I did: I took Bitcoin's weekly closing prices going back to 2010 and simulated someone putting in $50 every week from a few different start dates. I compared three approaches:
1. Plain DCA: buy $50 every single week no matter the price.
2. "Wait for the dip": save the $50 each week, but only buy (with all the saved cash) in weeks when BTC is at least 30% below its all-time high at that time.
3. Lump sum: put the same total amount in on the first day.

Everything is valued at this week's close of about $84,261.


A few things surprised me:

PhilosopherKing is right that waiting for a dip is still timing, but it barely matters in practice. Over the longer periods the dip rule ends up within 2-3% of plain DCA. Bitcoin spends so much of its life 30% or more below its previous high that the "dip" rule ends up buying most weeks anyway. It only looks better over the last year because BTC is currently about 33% below its $126k high.

DCA's real strength is protecting you from bad timing. Someone who started DCA at the worst possible moment, the November 2021 top, has still roughly doubled their money. A lump sum put in that same week is only up 29%. For a newbie who has no idea whether today is a top or a bottom, I think that's the best answer to the question in the title.

But nobody should think DCA means you're always in profit. Someone who started DCA when this thread was opened is at about -2% today, and at the worst point they were down around 34%. That's why the posts a page back about having an emergency fund first matter so much. If you have to sell your stack during one of those dips to pay a bill, DCA can't help you.

And to be fair to the lump sum side: if you happen to start early in a bull run, lump sum wins by a mile (Jan 2020 was +1046% against +195%). DCA isn't the strategy with the highest return. It's the one that's hardest to mess up.

So my takeaway for beginners is to pick an amount you can afford every week or month, keep buying through both the scary weeks and the exciting ones, and don't waste energy trying to catch the perfect dip. Over a few years it hardly changes the result.

Happy to run other start dates, amounts or dip thresholds if anyone wants to see a particular case.

Ted Salazar - SCR Lead Programmer feel free to read our news releases on prlog to get some background on our latest projects

I like this part of you instead of only given an opinion you used a backtest instead. But also result should be taken with caution cause depend on the period chosen outcome can change a lot. A four start dates aren’t enough to prove that waiting for dips will hardly change the result over few years.
Personally I would say that the biggest lesson from this example is that DCA have make things less pressured by removing the need to decide on whether if today price is good entry or not. Same plan can still be followed even if the person is wrong with market direction. This is best and useful for starters because the focus is not about finding the perfect strategy but having to stay consistent and not trying to go and predict every of your move.