In the end, it seems that amongst the most reasonable and prudent of planners, would not overly lump sum at the top, yet if they were to make such an error, then (absent some rare surprise/emergency exceptions) they should be more than ready, willing and/or able to continue buying BTC if the BTC price drops after the lump sum investment and especially if such dip lasts a long time and/or dips in considerably large kinds of ways. Personally, I don't give much of a pass or have a lot of sympathy for the lump summers who are not ready, willing and able to follow up with further BTC buys.. and if they have blown their whole wadd, then they are likely guilty of gambling rather than investing, which sure they are free to do what they like, but I am also free to not have much sympathy for such an approach to BTC.
In such scenario the best and the right thing to do is to keep buying, even when the price continues to go down , aslong is bitcoin even though it may takes years for it to recover one thing for sure base one his past performance it will surely come back stronger. When one continues to buy is not only increasing his stashes of bitcoin in a nice rate but at same time minimising losses because at that time you will be using DCAing to be purchasing bitcoin at different price interval. And not only that it will also increase the chances of making a bigger and better profit in a long run . And for those with goals as the price continue to drop it will also increase the chances of you getting to your target goal or accumulating goal faster .
I think that you have the idea correctly, yet sometimes we need to get into some of the specifics in order to rebutt the assertion that is being made... and so in that sense, maybe an example would be helpful in order to flesh out how some kinds of buying at the top might play out in terms of comparing someone who went in BIG and then just sat on his hands for several years, versus some other more practical possibilities of other scenarios of someone who might have been a bit more proactive in terms of not just sitting on his hands, but ongoingly buying BTC..
Let's say that in early 2021, the investor is in his mid 30s and he had already been investing in traditional assets for close to 10 years, so he had an income of around $36k that has been he had been slowly going up in his income and his then total investment portfolio was close to $100k, and so part of the reason that his investment had done so well is that he had been fairly aggressively investing around $120 to $250 per week for the past 10 years, which is a fairly large portion of his income $6k to $13k per year. So when he finds out about bitcoin in late 2020, he starts to consider that there might be some way that he could lump sum into bitcoin with around $30k of his investment portfolio without any major penalties.... So from the circumstances of this guy, we could come up with several different scenarios, and they all involve him getting started around March 2021 and figuring out how to use his lump sum versus
Scenario 1: Ends up with 0.5 BTC and an average cost of $60k per BTC, since guy lump sum buys around 0.5 BTC at $60k with his $30k and then just sits on the BTC investment and continues to invest around $200 per week into his traditional portfolio, which is about $36.2k over 3.5 years.
Total current value: $189.3k (0.5 BTC * $60k = $30k) + ($106.2k *150%= $159.3l)
Scenario 2: Ends up with 1.58 BTC and an average cost of $42k per BTC ($66.2k invested), since guy lump sum buys around 0.5 BTC at $60k with his $30k and invested around
$200 per week into bitcoin, which is about $36.2k to purchase an additional 1.08 BTC over 3.5 years.
Total current value: $199.8k (1.58 BTC * $60k = $94.8k) + ($70k *150%= $105k)
Scenario 3: Ends up with 1.925 BTC (0.167 + 0.6782 + 1.08) and an average cost of $34.4k per BTC ($66.2k invested), since guy divides his lump sum amount into 3 portions of $10k each to lump sum buys around 0.167 BTC at $60k with his $10k and then decides to spread his DCA & buying on dip portion which was allocated as
$20k and to put all of that into DCA over 2 years which resulted in around 0.6782 BTC - including that he decided to continue with his regular investment amount of
$200 per week into bitcoin, which is about $36.2k to purchase an additional 1.08 BTC over 3.5 years.
Total current value: $220.5k (1.925 BTC * $60k = $115.5k) + ($70k *150%= $105k)
Of course, there can be other variations of the scenarios in which a guy might either sit on his initial investment into BTC or if he might continue to invest into BTC or he might continue to allocate more of his investment into his traditional investments rather than BTC, and with a longer passage of time, the scenarios likely differentiate from themselves more and more.. at least historically, the scenarios that ongoingly continue to buy into bitcoin had tended to perform better than scenarios that either did not invest into bitcoin or took more whimpy approaches to bitcoin.. and yeah, we know that historical results do not guarantee future results, so we have to decide our bitcoin allocations and our level of aggressiveness in accordance with our own finances and psychology.
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It's good to read from another reasonable person on the forum, it's hard to see many these days. I wonder why people do not want to learn but always believe that a certain approach is a must for everybody. That is why you will see them shouting and shouting while some smart investors will continue to pocket the money. I wonder what's difficult for an adult to sense that I diversified my plan on Bitcoin investment and not even totally abandoned the HODLing he was complaining about but tried another approach to try and maximise my profits.
Voila! It worked more than HODLing. Now tell me, who is deceiving himself? I've learned to ignore them since I am not an investor in the crypto era, they are mere noise. Let them continue to shout why we continue to make the money in every way possible.
If you found a bitcoin accumulation strategy that works better for you, then there is nothing wrong with that, yet I doubt there is any way to systematize it in any kind of straight-forward way, and you are not even really that clear. Are you more profitable because you are accumulating more bitcoin or are you more profitable because your are accumulating more dollars (or is it both?).
Are you wanting to provide a link to your system? Is it free to participate and find out about it or do we need to pay? And, why wouldn't such a thing fall into another thread, even if everything that you are saying is true. ..and then just .link us to such other thread, rather than convoluting our current topic with what seems to be trading techniques to acquire more bitcoin (and/or dollars?).
By the way, I doubt that any of us are really proclaiming anything about just employing a bitcoin HODL strategy in this thread, even though HODL is in the name of the thread.
I think that largely we are attempting to address the various ways to build a bitcoin stash through various ways of buying bitcoin such as DCA, buying on dip and lump sum, even though also HODL might come into play at various times when running out of money or perhaps other circumstances, and many of us (including yours truly) consider that selling BTC is not a very good practice for those who have goals to accumulate more BTC, and so you are wanting to proclaim that we could include selling as a tactic into our accumulation strategies in order to accumulate more BTC than we might be able to accumulate through the employment of the various buying strategies alone.
I am having some troubles understanding how you are topical, even if you might be correct that your selling BTC to accumulate more BTC strategy works, which is also known as trading and some of us consider such strategies to fit into gambling, too.. and I doubt that many of us even doubt that gambling strategies might not be profitable, though there may well be questions about any ability to replicate such strategies rather than following more straight forward BTC accumulation/investing strategies that at least guarantee more accumulation of BTC, even though surely BTC is not guaranteed to go up in price, but there is a certain calculation that the odds are good that bitcoin retains strong enough fundamentals to continue to appreciate in value with the passage of time. Even if we are investors in bitcoin, we are not necessarily locked into our bitcoin investment, and some of us might even have various scenarios that we might consider to weaken or invalidate bitcoin's investment thesis which would cause us to sell large amounts or even all of our bitcoin holdings.
In the end, it seems that amongst the most reasonable and prudent of planners, would not overly lump sum at the top, yet if they were to make such an error, then (absent some rare surprise/emergency exceptions) they should be more than ready, willing and/or able to continue buying BTC if the BTC price drops after the lump sum investment and especially if such dip lasts a long time and/or dips in considerably large kinds of ways. Personally, I don't give much of a pass or have a lot of sympathy for the lump summers who are not ready, willing and able to follow up with further BTC buys.. and if they have blown their whole wadd, then they are likely guilty of gambling rather than investing, which sure they are free to do what they like, but I am also free to not have much sympathy for such an approach to BTC.
In such scenario the best and the right thing to do is to keep buying, even when the price continues to go down , aslong is bitcoin even though it may takes years for it to recover one thing for sure base one his past performance it will surely come back stronger. When one continues to buy is not only increasing his stashes of bitcoin in a nice rate but at same time minimising losses because at that time you will be using DCAing to be purchasing bitcoin at different price interval. And not only that it will also increase the chances of making a bigger and better profit in a long run . And for those with goals as the price continue to drop it will also increase the chances of you getting to your target goal or accumulating goal faster .
Stacking Bitcoin is of course better using the DCA pattern every week. It is true, as JJG said, that some examples of investors are definitely trapped at peak prices because they buy all at once without following up to continue accumulating every week. Yes, it will delay their investment because they do it all at once. To solve this, it would be a good idea to divide the money we have into several parts in DCA accumulation so that we don't get stuck at one price in the investment we make.
Some of them often assume that their entry is the lowest point, but actually they are wrong because the market can change suddenly, so DCA is the best for finding the lowest price in Bitcoin accumulation. With regular purchases we will also be more active in studying Bitcoin and we will also be more active in managing cash flow for our execution every week.
The example that I gave might even have some room for the lump sum buyer to include some cushion in his decision to lump sum into bitcoin, and there likely is nothing even wrong with lump summing into bitcoin, but then at some point realizing that the BTC price is moving against him, so when he put in the lump sum, he may well realize that there is a possibility that the BTC price could be at a high point rather than having more immediate upside potential, but he still might know all of that and still decide to get in with the idea that he will just buy more if the BTC price goes down rather than up.. so in that sense, he either should be holding back a little bit of his lump sum amount or he already knows that he has an ability to continue to buy BTC in the future, in case the BTC price goes down instead of up.. so he has already built in a plan that the BTC price might go down rather than going up... but his lump sum prepares him for UP, and his continued ability to DCA and/or to buy on dips prepares him for down.. so he is actually prepared for both directions by lump summing in, even if he could have had gotten his lump sum purchase at a lower price (but no one knows the future BTC price, and that is part of the justification for his lump summing in at whatever price he had chosen to lump sum in... No one lump sums into any investment including BTC with a large expectation that it will be going down, even though they may well already account for that possibility).
Even though in the pattern we are in the same destination, if DCA is compared with Lumpsum then I prefer DCA because it is easier for us to find the lowest price point in the long-term investment journey.
If all of a sudden, today, you were to receive a delivery of $12k in cash, you might reconsider your view about which one of the BTC buying options that you would prefer to employ, since your situation had changed and all of a sudden you had an extra $12k in cash that you did not have yesterday.
So part of the justification for lump sum is having the option to do it and then figuring out from there whether to do it and perhaps how to allocate the various options, and the best practice would be to consider all three options in regards to how to treat your extra $12k in cash.. You reassess whether you have enough emergency funds, you might even think about some consumption matters (or maybe even some other possible investments), and if you end up authorizing yourself to use all of it for BTC, you should consider all three of the categories for the amount that you are planning to put into BTC and there is no right decision about how to do it, since you presumptively already have a DCA system in place, so you can add to your DCA and/or you can decide to allocate some for buying on dips and/or some for lump sum buying right away..
Sometimes, historically, I have suggested that the default allocation would be 1/3 to each category (which would be $4k in this case), yet of course, many times our own particular circumstances would contribute towards our tweaking of the allocations of each of the categories, even though we surely should consider each prior to just blindly assuming what we would do.. and if the amount received happened to be $3k rather than $12k or $120k rather than $12k, I would imagine that each of the scenarios would cause us to consider how we are going to allocate differently.. because details and amounts materially affect us.. especially when they might become really in front of us, rather than theoretical...
And, by the way, these kinds of situations really do sometimes happen to people,** and surely any of us who already have bitcoin buying systems (and thoughts about it) in place are going to be in a much better position to deal with it and to make sure that we use the money in a bitcoin-focused way, as compared with folks who are not thinking about bitcoin and do not have bitcoin systems already in place, even if they might concede that investing into bitcoin is a good idea, if they do not have systems in place in which they are already acting upon such beliefs, then they are likely not going to put such systems in place, even if they unexpectedly came across a surprisingly large sum of money.
** I had such situations happen to me in fairly BIG ways on a several occasions in the past nearly 11 years since I got into bitcoin, and when such cash flush circumstances happen, it feels really good to already have bitcoin buying systems in place. I am sure that almost anyone has circumstances in which s/he is suddenly flush with cash, and it is my belief that the more and more that we spend time creating strong cash management systems and even strong investment systems (even if we might be purposefully choosing to invest fairly whimpily - conservatively) - we still can end up coming across situations in which all of a sudden we have more cash than we expected to have, and we immediately know where to plug in such cash. Some folks might come to bitcoin and/or investing with very screwed up finances, so maybe they are never really perceiving ways to get ahead or to catch a break, but sometimes even folks who live really tight budgets with little to no discretionary income might find that after several years of building their finances, they start to come across great opportunities more and more frequently.As Saylor did, he bought at the peak of the price cycle, and bought again when the price fell and he routinely did this so that the average execution price was below the current price. So there is no analysis that he needs but his habit of continuing to buy makes him find the lowest price in long-term investments.
So frequently people proclaim that Saylor tries to buy bitcoin on the dip, which truly is not even any kind of actual fact that even matches up with Saylor's actions or his words.
Saylor tends to buy bitcoin whenever he gets money or he is able to get money, which truly is a very DCA kind of a practice, even if he is dealing with very large amounts and even though the amounts are frequently quite inconsistent in terms of whether he is buying based on some kind of an extra cashflow f the company or whether he raises money through some kind of a financial instrument that regular people are not able to enter into many of the Saylor kinds of financial instruments or even to leverage debt anywhere close to the levels that he and MSTR is able to accomplish.
In other words, Saylor/MSTR is buying BTC no matter the cost, whether it dips or not, and surely he was not buying during some of the dips because he actuall was not able to raise money or otherwise have extra money for bitcoin during the largest of the 2022-ish price dips.. but yeah, folks gloss over the actual facts and try to proclaim Saylor is buying dips, when for the most part, he is not... he just buys whenever he gets cash, which is quintessential DCAing, even if the amounts happen to be way the fuck larger than most mortals are able to imagine within their own budgets.
Stacking Bitcoin is of course better using the DCA pattern every week. It is true, as JJG said, that some examples of investors are definitely trapped at peak prices because they buy all at once without following up to continue accumulating every week. Yes, it will delay their investment because they do it all at once. To solve this, it would be a good idea to divide the money we have into several parts in DCA accumulation so that we don't get stuck at one price in the investment we make.
Some of them often assume that their entry is the lowest point, but actually they are wrong because the market can change suddenly, so DCA is the best for finding the lowest price in Bitcoin accumulation. With regular purchases we will also be more active in studying Bitcoin and we will also be more active in managing cash flow for our execution every week.
You are making a very good point and at the same time not being too clear with some of your statement, so perhaps I would like you to clarified me on the aspect you mentioned that DCA is the best way for founding the lowest price of Bitcoin to accumulate or are you perhaps saying the work of DCA is to be identifying every price dip of Bitcoin before an investor can invest?,
perhaps if that be the case you are obviously referring to the lump sum strategy because is the strategy that focus on identifying every price dip to take advantage of while DCA method work contrary to that because waiting to accumulate Bitcoin when the price is lower is the last thing a DCA investors will consider because with DCA you don't need the price to move to a certain direction before you can be convinced to accumulate because at any price you can buy Bitcoin.
For sure, ginsan is wrong when he suggest that DCA is best for finding the lowest price... and that is buying on dip.
DCA is best for buying bitcoin regularly and working with in your budget.
You are wrong Salahmu, when you say that lump sum strategy is best for buying on dip... since lump sum strategy in its pure form does not necessarily have anything to do with buying on dips. Buying on dips is buying on dips, and lump sum is buying when you get some extra money or you have just allocated that money to buying bitcoin right away at any price.
Yes, the categories sometimes overlap.. so there could be cases that they combine, but to suggest that DCA or even lump sum has to be done for dips, that is mixing up categories, since even though you could attempt to strategize buying on dips, you could have a whole separate buying on dip strategy, and sometimes when people proclaim that they are employing their DCA and their lump sum only during dips, then those kinds of strategies begin to fall more into the category of buying on dips rather than either DCA or lump sum, even though there surely can be overlap and part of the problem might come when one strategy is described as having to have a buying the dip component or even to error on the other side and to suggest that merely because you have a DCA or a lump sum strategy that you are purposefully going to avoid thinking about the dip, which also sometimes seems strange if you might have the option to execute some buys and there is a dip currently happening, and you are trying to figure out for yourself when to buy, so even your own actions might end up having to go down a path that you usually do not go down, based on actual real world happenings in the midst of your decision to purchase (or not to purchase).
