2 years ago on this day the BTC price was >50k. A lump summer would still not be in the black by now. Maybe sometime in the coming days/weeks.
A DCA'er would have almost doubled his coin.
Since we can never know when a dip is coming in the long-term future, neither DCA nor lump sum should be viewed from a perspective of investing at the lowest price of a dip. And before anyone mentions it: the perspective of having invested in Bitcoin during its "unicorn" days is not realistic either.
Both are profitable strategies. But combining DCA with short-term price predictions based on TA/FA is best, in my view.
I like to consider lump summing as a kind of front running of an investment (of course in this case we are referring to BTC), and surely the guy who lump sums in at $50k at some point in 2021 if waging (or insuring himself) in case the BTC price goes up and does not come back down... There is nothing wrong with that, but if he blows his whole wadd in the lump sum, then he has no more to buy if the BTC price moves against him and ends up going down rather than up.
One of the good reasons not to blow your whole wadd, and even if you spend everything that you have at the time of lump summing, if you still know that you have a cashflow coming in, then you might be able to make up for some of how much you ended up putting on the table in the lump sum.
Maybe an example is in order, and a person who might have had $10k that he could spend right away in late 2021, and maybe the BTC price is around $50k at the time that he is trying to make his decision, and he knows that he has a $100 per week cash flow coming in, so in 2 years, he could have had matched the same amount of investing, so in that sense he has $20k over 2 years, but he ONLY has $10k right at the moment that he is deciding whether or not to DCA... So yeah, if he ends up buying 0.2 BTC at $50k for $10k then he might be better off if he continued to DCA with another $100 per week over the next two years and ends up with a total of 0.6315 BTC (0.2 btc plus 0.4315 BTC) (with $20k spent, an average cost of $31,670 per BTC and current value that is $27,659.. so even with this about 38% in profits) .. or if he would have front-loaded the extra $10k, and bought $20k BTC at $50k which would have had been 0.4 BTC, and perhaps no more wadd to blow.
And, yeah of course nothing wrong with trying to supplement as well with buying on dips, to the extent that you are able to figure anything out with TA/FA as you mentioned... which is also another one of the arguments for DCA that mostly relies on figuring out your own personal cashflow and investing what you can from there rather than gambling on BTC price moves that may or may not end up happening, even if you think you got some things related to TA/FA figured out, which an overwhelming majority of people do not have that kind of stuff even close to figured out, especially when looking at the future as compared with their abilities to look at the past and still not knowing how to frame what had happened in the past in a meaningful and actionable kind of way that is any better than deploying some form of DCA or hybrid DCA.
DCA is a shit strategy if you forget to buy. I missed out on the last 5%. :/
It's not DCA if its a manual input, imo.
I've been DCAing since 2013, all done in the background, automatically.
The only time I occasionally intervene is to adjust a parameter. (amount, frequency etc.)
Of course there are some advantages to automatic DCA in terms of not having to think about it, but there may well be some disadvantages if whatever exchange you are using is batching the orders and even front running them... so I don't personally like automatic DCA... and yes, you don't have to have the automatic component to still be employing DCA and you also don't necessarily need to be consistent either..
For example, if you are assessing your cashflow once a month, then maybe you make weekly assignments of your DCA amounts that relates to how much cashflow that you have each week, and if your cashflow varies a lot then your DCA amounts also end up varying a lot, but it does not become less DCA based on those kinds of inconsistencies of timing and/or inconsistency in amount matters because you are still employing DCA by assessing how much BTC to buy based on your cashflow considerations, and you are not judging how much BTC to buy based on attempts to predict short-term movements in the BTC price.. which would be more in line with buying on dips rather than DCA.. even though to throw in another twist, you could also incorporate buying on dips within your BTC buy windows by attempting to hybridize your DCA buys through trying to catch the dips during the week or whatever might happen to be your DCA window for any particular DCA buy that you choose to carry out.
...Oh gosh that was quite a rambling post (what else is new?).......
Why am I not surprised?
Because you are a BIG MEANIE.
...I had to go back to remember what it was that I wrote.......
Why am I not surprised?
Because you look like this:
finally a wall worth to observe! looks massive!
You will watch with awe how it's going to be sliced like butter when we break $50k next week.
"They" are getting scared.
I really love them!! But to be frank most of the time that I think about bottoms it's not about charts.
I think we won't go down to that 15k area ever again (super extreme black swan events excluded). But there will be future bottoms of course. Hopefully above the last ATH like it's always been before this cycle.
You may well be more bearish than me, or maybe we are just expressing ourselves differently.
I think that our move to $15,479 was a pretty high level of unusual, and so that was about 35% below the then 200-week moving average.. and so the 200-week moving average was maybe slightly below $24k at that time.
Today we have a 200-week moving average that is going up nearly $25 per day, and it is right around $29,161, so 35% below the 200-week moving average is currently just below $20k, and I am even having difficulties imagining going that low, but I think that it does not hurt to have a little bit of insurance to keep some orders at that level of 35% below the 200-week moving average, and so going further below $20k seems like overkill to a situation that is already overkill (having buy orders currently going down to $20k is already overkill).
Yes, and also all the BTC buy orders between $20k and $30k are likely overkill because maybe we never touch the 200-week moving average again, this cycle.. even though we are not too far away from our earlier touching of the 200-w eek moving average in terms of either price or in terms of time... which would have been mid-October when our BTC prices were barely above $27k, and the 200-week moving average was then about around $28,160.
I am not going to say for sure, but I think that for this cycle, it would maybe be less than 20% odds that we see blow the 200-week moving average again.. . even though I am likely going to continue to maintain BTC buy orders that are more or less 35% below the 200-week moving average.. because I can.. and because I might not have had been able to do that when I was in my earlier BTC accumulation stages.. such as 2014-2016.. but now, it is more just an easy something to have just in case and not having to worry about the matter.. even if I am likely leaving cash on the table..
Actually another thing about leaving those kinds of buy orders on the books might be the size of the buy orders, whether they add up to a lot of cash or if they might just be symbolic... so for example if someone has 25 BTC which has a spot price value of more than $1 million, he may well have anywhere between $50k (5%) and $150k (15%) worth of outstanding BTC buy orders..and I am pretty sure that all my buy orders still ONLY constitute right around 2% of the whole value of my BTC holdings... so for me, it is difficult to feel that I have too much cash when it still ONLY adds up to about 2%-ish of the value of my BTC holdings.
When I look at some of my information from around the top of the BTC price in 2017, it seems that I had gotten into the more than 10% cash arena, surely if we end up getting a lot of UP this time around, then maybe there could be some scenarios of my own getting back to the more than 10% cash arenas, but it scares me to have that much cash, even though 2% is also feeling like a lot of cash right now.. so maybe I still have not worked out the balancing of some of my own tensions in regards to how much cash might be good to have and at which points in the cycle, and probably I would have had been in even a worse cash to BTC balancing position if I had not suffered my June 2023 Binance accident..
Slowly, but surely, 2023 is closing the gap with 2021. 2024 is going to bring in new wonders...
Are we really going to have the "wonders" in 2024?
There are a lot of people talking really BIG right now... even for 2024.. I think BIG talk is contagious. .and will such BIGGness end up showing in the charts?
Many here celebrate seeing btc going up, because their holdings are growing in value.
Some of us celebrate seeing btc going up, because we have to sell less and less of it to live.
The
You buy BTC to have more fiat
I/we sell fiat to have more BTC
>we are not the same<
Appropriate known quote on your post
There does come a time in which you should be able to do both, and being able to have a foot in both doors is likely a good thing...also keeping our bitcoin in various kinds of different kinds of stashes might be a good thing too.
How much do any of us have on lightning network, and do we have nodes or are we using custodian wallets or self-custodian wallets.. not easy to do... but sometimes, there may be some custodian services involved.. i am still practicing with Phoenix and Breez for my supposed mostly self-custodian lightning solutions, but still not running into a lot of ways to use them in the real world... but still keeping my eyes open.
I think the hardest part for newcomers is the first bull run followed by a hefty correction. It's hard to deal with the "I'm a genius" followed by the "shit I fucked up" roller coaster of emotions. Many of those newcomers sell and call it a loss. Some of the newcomers tough it out and live to see the next bull run with newfound confidence in the bitcorn.
This is a big reason to do the "don't invest what you can't afford to lose". Being down and in a shitty position can force you to do things that just make things worse.
This is very true. However, "what you can afford to lose" becomes a sliding scale for many people while facing losses they may not have expected. Maybe they initially thought "Shit, I can afford to throw $10,000 at this and lose it worst case scenario." Then suddenly they see $10,000 turning into $4,000 and start thinking "Well better to have $4,000 instead of $3,000 in my pocket".
There are many studied psychological theories such as Status Quo Bias and Risk Aversion Bias that greatly impact people and thier decision making abilities. Simply put, you may find yourself doubting the decision you made today even though you're currently 100% sure of it. Emotions are a very powerful and funny thing that many folks do not understand how to control or be self aware of.
A close friend of mine went to college for many years and studied investing and finance. While speaking to him during one of the bear markets he asked "How are you feeling with the current bear market?" I told him that it's just part of the cycle and I've been buying as much as I can on a weekly basis. I told him everything has cycles including the stock market. Now is the best time to buy. He told me that this strategy and mindset is one of the hardest things to overcome in the investing/finance world and something many (even expierenced) investors struggle with.
This is a great example in which the person who bought $10k worth of bitcoin subsequently suffers a 60% or greater crash (loss of value), and if he continues to buy, then he may well bring down his average cost per BTC and end up in a much better position based on such persistence in his buying... see my examples earlier in this post.
Poll
