I know some people in my locality didn't buy bitcoin when it dropped to 20k-15k$ in 2022 because they waited for it to drop to 12k-10k$. And the irony is that up to now bitcoin has increased to more than 50 thousand dollars in their regret but they are still waiting and have not bought any bitcoin. They are still desperately waiting that there will be a black swan that causes bitcoin to plummet again.
Of course, we cannot really know for sure; however between mid-June 2022 and mid-October 2023, bitcoin prices spent a lot of time below the 200-week moving average, and it even got into 35% below the 200-WMA at its lowest price point, and during that time, the 200-WMA moved up its lowest rate ever, which was right around 20% annualized and $22.2k to $28.2k in actual dollar value for those 16 months.
Likely into the future the 200-week WMA is going to continue to have depreciating quantities of increases, but it still is largely measuring the average BTC price over 4 years periods of time.. and is continuously moving up and continuing to serve a a pretty strong measure of bitcoin's bottom.. .so it becomes both unrealistic to expect BTC prices to go below the 200-week moving average and/or to stay below the 200-week moving average for very long and also to even expect spiking quantities that are 20% to 30% below the 200-WMA seems quite unrealistic, even if we did end up having that one time experience so far in bitcoin's 15 year history (but maybe just sticking with it's around 13.5 year price history).
In other words, they can wait around all that they like in a fantasy world in which their waiting around largely shows that they are NOT sufficiently understanding what they are waiting for and how they are measuring realistic scenarios.. even the buying opportunties that likely come when the BTC price is anywhere even near the 200-week moving average.. which had been a pretty reliable bottom prior to June 2022.
You can see bitcoin's spot price comparisons to the 200-WMA
at this website.
If they are not greedy and do not put pressure on themselves, and they use the DCA strategy from 2022 until now. I bet they are making significant profits and sleeping soundly because they bought bitcoin at the most ideal price using the DCA strategy.
Of course, there can be some additional value when buying bitcoin at relatively low prices, and surely some people ONLY have DCA as their resourceful way to buy bitcoin or anything else because they do not have any ability to lump sum their investment, yet I would not consider DCA investing into bitcoin to ONLY be productive in terms of buying during dips, especially since historically we have seen that even those people who felt that they had overpaid for bitcoin they end up profiting down the road, and surely DCA is going to continue to level out their average cost per BTC whether the BTC price goes up or it goes down, there can end up being a dogged and ongoing accumulation of BTC, in which there are a lot of benefits to just continuing to buy, even if your cost per BTC is higher than some folks who had been able to time the market and/or maybe they got lucky and they bought some BTC, but then they stopped buying...
The longer the timeline, the more that DCA can show itself as paying off, and works especially for folks who either do not have any kind of savings/investments but they have discretionary income or those folks who are nervous about saving and/or investing into anything, so a DCA approach can be amongst the only (if not the best) ways to get them comfortable to set aside some of their discretionary income.
[edited out]
The way is see it I think that most newbies that feel the need to diversify have not understood the value of bitcoin as an asset, and most of them think in terms of the more asset the more safe I am, but they fail to understand that having little value in many asset is a waste of time and they miss out on compounding value of bitcoin, what newbies need to see is that having value in one asset like bitcoin would be better than diversifying.
As long as they stay in bitcoin, they still get the compounding, but the compounding is with such a small amount of value that it is difficult to see that it is making a difference.
So someone who invests $100 per week for 10 years into bitcoin starts to see compounding in his at a much higher actual values than someone who invests $10 per week, but the percentage of compounding is the same, but it is more difficult for the lower amount guy to see it in terms of actual numbers.. even though on a percentage basis the returns and the compounding would be the same. You can plug those kinds of numbers into our earlier examples.
So maybe if we start out with a BTC price of $55k, and we anticipate that the BTC price will go up about 8% per year and the amount that we invest goes up 20% each year (meaning the first year is $10 week and then the next year is $12 per week and then the next year is $14.40 per week, then the next 10 years might look like this:
[First example]
Date BTC_Price Weekly$Amt $Invst/Yr RunTotal$Invst BTC/Yr TotalBTC Total$Value
1/14/25 $59,999.40 $10.00 $520.00 $520.00 0.00900009 0.00900009 $540.00
1/14/26 $64,799.35 $12.00 $624.00 $1,144.00 0.01000010 0.01900019 $1,231.20
1/14/27 $69,983.30 $14.40 $748.80 $1,892.80 0.01111122 0.03011141 $2,107.30
1/15/28 $75,581.96 $17.28 $898.56 $2,791.36 0.01234580 0.04245721 $3,209.00
1/14/29 $81,628.52 $20.74 $1,078.27 $3,869.63 0.01371756 0.05617477 $4,585.46
1/14/30 $88,158.80 $24.88 $1,293.93 $5,163.56 0.01524173 0.07141650 $6,295.99
1/14/31 $95,211.51 $29.86 $1,552.71 $6,716.27 0.01693526 0.08835176 $8,412.10
1/15/32 $102,828.43 $35.83 $1,863.25 $8,579.52 0.01881695 0.10716871 $11,019.99
1/14/33 $111,054.70 $43.00 $2,235.90 $10,815.43 0.02090772 0.12807644 $14,223.49
1/14/34 $119,939.08 $51.60 $2,683.09 $13,498.51 0.02323081 0.15130724 $18,147.65
and so part of the assumption would be that the guy who has the $100 per week could choose to put it ONLY into bitcoin and/or cash.. or he could divide it into 3 parts or 5 parts or 10 parts, and so then he has just diluted his bitcoin investment, and hopefully he chooses something good to invest into, even though if we have already identified what we believe to be a good divestment, then why would be want to dilute our investment by investing into inferior investments.. unless we were to have the same level of feeling towards each, and this is especially true with people who do not have a lot of disposable income to work with.. meaning that either their income is not high or their expenses might be close to the level of their income.
And I think it's good to only diversify when you have enough cash and income value to mange it, most newbies have very little cash and income and still want to diversify, there by reducing their allocation to bitcoin and would not end up meeting a goal of having a substantial amount of bitcoin within 4-5 years which should be a first stage of maturity of their investment.
Yep.. exactly. In almost any scenario, if someone is a newbie, even after 4-5 years, it might be difficult to see a lot of progress... and that may well not be very important since it could well be the case that compounding is already starting to kick in, but it is harder to see until it might have had folded over on itself several times.. which again is not guaranteed, but that compounding, doubling and/or folding in on itself tends to be a product of several years and it becomes more and more amazing the longer that you stay into an investment.. and at some point down the road, you would be able start to drawing very large values from the investment relative to your earliest contributions.. so guys who might have had been contributing $10 to $100 per week into their investment in their earlier years would later able to draw a lot more.
Even if we plot out the same presumptions from the earlier example of 8% per year average BTC price appreciation and increasing our contributions 20% each year.. we still might feel that we are plodding along.. and we might feel that we are having trouble really seeing progress.
Date BTC_Price Weekly$Amt $Invst/Yr RunTotal$Invst BTC/Yr TotalBTC Total$Value #Yrs1/14/25 $59,999.40 $10.00 $520.00 $520.00 0.00900009 0.00900009 $540.00 1
1/14/26 $64,799.35 $12.00 $624.00 $1,144.00 0.01000010 0.01900019 $1,231.20 2
1/14/27 $69,983.30 $14.40 $748.80 $1,892.80 0.01111122 0.03011141 $2,107.30 3
1/15/28 $75,581.96 $17.28 $898.56 $2,791.36 0.01234580 0.04245721 $3,209.00 4
1/14/29 $81,628.52 $20.74 $1,078.27 $3,869.63 0.01371756 0.05617477 $4,585.46 5
1/14/30 $88,158.80 $24.88 $1,293.93 $5,163.56 0.01524173 0.07141650 $6,295.99 6
1/14/31 $95,211.51 $29.86 $1,552.71 $6,716.27 0.01693526 0.08835176 $8,412.10 7
1/15/32 $102,828.43 $35.83 $1,863.25 $8,579.52 0.01881695 0.10716871 $11,019.99 8
1/14/33 $111,054.70 $43.00 $2,235.90 $10,815.43 0.02090772 0.12807644 $14,223.49 9
1/14/34 $119,939.08 $51.60 $2,683.09 $13,498.51 0.02323081 0.15130724 $18,147.65 10
1/14/35 $129,534.20 $61.92 $3,219.70 $16,718.22 0.02581201 0.17711925 $22,943.00 11
1/15/36 $139,896.94 $74.30 $3,863.64 $20,581.86 0.02868001 0.20579926 $28,790.69 12
1/14/37 $151,088.70 $89.16 $4,636.37 $25,218.23 0.03186667 0.23766593 $35,908.64 13
1/14/38 $163,175.79 $106.99 $5,563.65 $30,781.88 0.03540742 0.27307335 $44,558.96 14
1/14/39 $176,229.86 $128.39 $6,676.38 $37,458.26 0.03934157 0.31241492 $55,056.84 15
1/15/40 $190,328.24 $154.07 $8,011.65 $45,469.91 0.04371286 0.35612778 $67,781.17 16
1/14/41 $205,554.50 $184.88 $9,613.98 $55,083.89 0.04856984 0.40469762 $83,187.42 17
1/14/42 $221,998.86 $221.86 $11,536.78 $66,620.67 0.05396649 0.45866411 $101,822.91 18
1/14/43 $239,758.77 $266.23 $13,844.13 $80,464.80 0.05996277 0.51862688 $124,345.34 19
1/15/44 $258,939.47 $319.48 $16,612.96 $97,077.76 0.06662530 0.58525218 $151,544.89 20
1/14/45 $279,654.63 $383.38 $19,935.55 $117,013.31 0.07402811 0.65928029 $184,370.79 21
1/14/46 $302,027.00 $460.05 $23,922.66 $140,935.97 0.08225346 0.74153375 $223,963.22 22
1/14/47 $326,189.16 $552.06 $28,707.19 $169,643.17 0.09139273 0.83292648 $271,691.59 23
1/15/48 $352,284.30 $662.47 $34,448.63 $204,091.80 0.10154748 0.93447395 $329,200.50 24
1/14/49 $380,467.04 $794.97 $41,338.36 $245,430.16 0.11283053 1.04730448 $398,464.84 25
1/14/50 $410,904.40 $953.96 $49,606.03 $295,036.20 0.12536725 1.17267174 $481,855.98 26
1/14/51 $443,776.75 $1,144.75 $59,527.24 $354,563.44 0.13929695 1.31196869 $582,221.21 27
1/15/52 $479,278.90 $1,373.71 $71,432.69 $425,996.12 0.15477439 1.46674308 $702,979.00 28
1/14/53 $517,621.21 $1,648.45 $85,719.22 $511,715.35 0.17197154 1.63871462 $848,233.44 29
1/14/54 $559,030.90 $1,978.14 $102,863.07 $614,578.42 0.19107949 1.82979411 $1,022,911.46 30
And sure it could take a while for the starting to feel rich to play out, and sure maybe we are also expecting that there could be some explosive price moves to the UPside in bitcoin, even though maybe in our own planning, we attempt to prepare for more straight-line kinds of scenarios because they are easier to attempt to plan around (even though we know that the path is not going to necessarily be a straight-line exactly), while at the same time we may well also develop contingency plans regarding how to deal with other scenarios that might play out later down the road (and the UPs and Downs along the way).. but in the mean time, we would stay focused on ongoingly, persistently and consistently accumulating BTC because we can see some level of aggressiveness and focus as a good way to be preparing for some of the unknown aspects of our future.
