Dollar Cost Averaging Question

[Wexnident]

Do whatever suits you ig? It depends on the amount of effort and possibly the amount of extra money you could pay for fees tbh. Effort being trying to check weekly on when the market is on a pretty good dip though in general, it's a buy whenever you want moment. You're doing DCA, it isn't exactly necessary to take into account the current price since you're expecting profits far far off into the years. Just that you might be that type who wants to buy the dip, hence why I said it depends on the amount of effort you want to exert.

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[Dhaniii]

no need to buy bitcoin every day or every week, but buy it every time you have the opportunity when the price has peaked down due to market price corrections, then buy it all at once. when you are in doubt about the market, up or down on the next move, it's better to just buy half of your property before the bitcoin movement moves and buy back half when the market price is clear.

[Little Mouse]

If I wanted to buy $1,400 of bitcoin every week, should I buy $200 a day or should I buy the $1,400 every week?

It's totally up to you. You are the one to decide. If you are following dollar cost averaging method to invest in BTC, pick any time frame and follow that. It can be a daily $200 or weekly $1400. Frequency is something you should set first, it depends on your time, fund availability etc.

no need to buy bitcoin every day or every week, but buy it every time you have the opportunity when the price has peaked down due to market price corrections, then buy it all at once. when you are in doubt about the market, up or down on the next move, it's better to just buy half of your property before the bitcoin movement moves and buy back half when the market price is clear.

OP is talking about DCA. You should know what DCA is. DCA is a method to make your purchase price average (lower).

[Oilacris]

no need to buy bitcoin every day or every week, but buy it every time you have the opportunity when the price has peaked down due to market price corrections, then buy it all at once. when you are in doubt about the market, up or down on the next move, it's better to just buy half of your property before the bitcoin movement moves and buy back half when the market price is clear.

When it comes to buying and selling then this is actually an own personal choice or preference because its our money then its our full control
on what actions we would make on this one.

DCA or simply waiting for the dip is someones decision because not all would really be have the funds or finances
and could only done single purchase and thats where we do really mind off much.

So its a personal choice or action.

[kawetsriyanto]

If I wanted to buy $1,400 of bitcoin every week, should I buy $200 a day or should I buy the $1,400 every week?
Any options will be greatly appreciated.

Each decision will have its positive and negative side.
All in weekly with $1,400: You will save some dollars to pay a fee of trading (purchasing). And if you withdraw it to your personal hardware wallet directly, it will also save dollars for fees of withdrawing.
But, you may miss some chances to get the lower price if once the price drops after you are all in buying BTC at that time.

Daily on $200, it may lead you to get lower price following the daily changing price. You may get it lower or even higher.
However, once more, the fee to spend maybe much more because you need to buy it several times.

Or, you can buy it twice, by dividing twice purchase in a week to save more dollars for fees but also get lower price probabilities.

[Sayeds56]

It is preferable to buy it once a week when the price of Bitcoin is suitable

Time based buying is not necessary, instead it should be dip based or support based on chart where price bounce back is likely to happen. Dollar-cost averaging is the strategy of spreading out your stock or fund purchases, buying at regular intervals and in roughly equal amounts. When done properly, it can have significant benefits for your portfolio. this strategy will make your into quickly when market bounces back that is why  it is considered very successful strategy.

 https://www.nerdwallet.com/article/investing/dollar-cost-averaging-2

[Boov]

If I wanted to buy $1,400 of bitcoin every week, should I buy $200 a day or should I buy the $1,400 every week?

Any options will be greatly appreciated.

There's no need to buy every week, just look on the trend of the chart and doing a cost averaging you should see a continuous drop before deciding to take a buy actions. That's right to have a $200 per entry but be careful, once there's a quick recovery don't attempt to panic buy; you might have a break even profit. Always follow the rules of buy when low and sell at high.

[PeRo]

You should buy 1.400$ a week. Dollar Cost Averaging is mostly done weekly, some investors might do it monthly, depending which time frame is more comfortable. I wouldn't recommend daily since you don't have that much fluctuation on the price daily most of the time. So it would just make investing a bigger job, weekly is much easier for you. Of course, you should set the amount you want to invest weekly according to your full investment fund.

[odolvlobo]

Rationale:
1. You will (over time) benefit from the daily fluctuations in price
2. Assuming the buys are made on an exchange the only fees will be the exchange fees for each buy - these are likely to be on a percentage basis and therefore indifferent to one $1400 buy or seven $200 ones;
3. withdrawals to your wallet can be done weekly or monthly as you prefer to minimise network transaction fees

If you do Dollar Cost Averaging, you won't care too much about fluctuation.

Of course you do - its the whole point of buying on a DCA basis: you recognise that the price varies up and down (i.e. fluctuates) and so you spread your buys in order that sometimes you benefit from buying at a lower price.  If you didn't care about fluctuations in price you may as well just use your entire investment in one go and not bother to cost average.

There are two scenarios for DCA. One is when you have a lump sum of money to invest, and the other is how to invest your income over time.

Lump Sum Scenario

In the lump sum scenario, it can be shown that investing the lump sum at one time is the best strategy (on average). Of course, your return will vary depending on what happens after investment, and DCA would reduce that variance. However, DCA in this scenario has an opportunity cost which can easily outweigh that benefit.

Imagine that you invest portions of a lump sum over a year. You expect the price to increase over time, so consider how much more return you would have at the end of the year had if you didn't wait a whole year before investing those last portions.

Investing Income Scenario

If you have an income, the idea of DCA is to automatically invest a fixed portion of that income when you receive it. This encourages you to save and it eliminates the temptation of timing market. It is the superior strategy.

[Beparanf]

You should buy 1.400$ a week. Dollar Cost Averaging is mostly done weekly, some investors might do it monthly, depending which time frame is more comfortable. I wouldn't recommend daily since you don't have that much fluctuation on the price daily most of the time. So it would just make investing a bigger job, weekly is much easier for you. Of course, you should set the amount you want to invest weekly according to your full investment fund.

Its highly depend on the volatility if the price of assets that you are buying. The more volatility means you should spread your DCA more to scoop assets at better average price. Bitcoin price action is changing in high percentage everyday so the general DCA principle is not that applicable since its commonly use on stock market which price varies few percentage per month or weeks.

DCA everyday is the best way to apply in crypto if you want a safe average price. Remember that price in daily basis can change more than 10% so what's more if you do a single buy per week.

[bittraffic]

You should buy 1.400$ a week. Dollar Cost Averaging is mostly done weekly, some investors might do it monthly, depending which time frame is more comfortable. I wouldn't recommend daily since you don't have that much fluctuation on the price daily most of the time. So it would just make investing a bigger job, weekly is much easier for you. Of course, you should set the amount you want to invest weekly according to your full investment fund.

Its highly depend on the volatility if the price of assets that you are buying. The more volatility means you should spread your DCA more to scoop assets at better average price. Bitcoin price action is changing in high percentage everyday so the general DCA principle is not that applicable since its commonly use on stock market which price varies few percentage per month or weeks.

DCA everyday is the best way to apply in crypto if you want a safe average price. Remember that price in daily basis can change more than 10% so what's more if you do a single buy per week.

Seem a hard job to do unless he is willing to watch the chart every day and trade. There is a dip in price every day but I'm not very sure if it's worth it since you will have to keep the BTC in the exchange as you keep accumulating.

If I have to keep DCAing, I'd just wait for the dip and buy the whole $1400 like this very day. If the price falls, then just keep buying if there are funds left. Or after receiving paycheck after a month from the day job.

[lumierre]

If I wanted to buy $1,400 of bitcoin every week, should I buy $200 a day or should I buy the $1,400 every week?

Any options will be greatly appreciated.

In terms of price, you will not guess in what moment of the week it will be the most favourable, so the only thing that you will regulate by buying in one day or every day is fees that you spend. If you buy just paying for transaction fees, it is better to buy 1400$ straightaway as you need to pay a fixed fee no matter how big your transaction is. Nevertheless, if you use a centralized exchange where you have to pay, for example, 1% from the whole sum, it doesn't matter for you what way to choose.

[Gyfts]

Doesn't make too much sense to separate the transactions out if you're going fiat to crypto. I've seen people mention the fees which is a consideration, but under the assumption you're using a centralized bank account and/or converting fiat to crypto, it's more of a hassle than it's worth. I wouldn't even bother making a risk with an exchange numerous times, do one large transaction and take ownership of the crypto by taking it off the trading platform immediately. You don't own any coin in which you do not process the private key.

[aysg76]

If I wanted to buy $1,400 of bitcoin every week, should I buy $200 a day or should I buy the $1,400 every week?

Any options will be greatly appreciated.

Most probably the weekly DCA investment is best for you and you have good budget for the same like $1400 weekly can acquire you good amount of bitcoins. I am also a DCA investor and now i have been doing it for regularly for six months but last time i managed to reach $100 week for the first time in my six months DCA journey.I am also running the thread for the same on the forum to keep the members updated about how it's going and you can check it out for reference but remember it's weekly DCA investment:

My Past six months bitcoin journey

The best part is you want to invest in bitcoin not some altcoins which will give you good profits in the long run so just be patient enough to hold for all these years and buy at dips if you get chance.The amount is big so make some wise decision and store them safely in your wallets.

[Anonylz]

Dollar cost average is good but what happens when you don't have the extra funds to dca! If the asset you are holding is btc, it is fine if you are able to dca when the price is down but if you can't at that time no need to worry much, hold and patience has always worked,  it also applies to other assets (the good alts of course). No need to build a mountain out of a small stone 

[KaliLinux]

Dollar Cost Averaging is usually done weekly or monthly with smaller amounts of money depending on your budget any paycheck, so you can't really ask everyone to buy Bitcoin with same amount of money.
Investing $1400 weekly makes sense only if you have much bigger paycheck and if you have enough money for food, utilities and everything else .
There are several website doing DCA calculations but dcabtc.com is best I found so far:
https://dcabtc.com/

I totally agree with you in the sense that, I would consider my paycheck which is monthly here, and my budget. I believe these two variables will truly help you to make the right decision cos it will just be a monthly transaction with just smaller fees instead of many small transaction fees per month which will eventually be more than what should be required.

[Akash1243]

What you want to do can be referred to as SIP, i.e. Systematic Investment plan whose main purpose is to reduce the impact of volatility on your overall invested amount.Having said that logically the greater the number of investments the greater the DCA/SIP effect which would result in lesser impact of volatility.
Hence if you want to invest 120$ you must select 4$/day plan over 30$/week plan but due to Maker/taker fees,taxes,minimum purchase amount  and other variables people cant always optimize this strategy.

[Wind_FURY]

If I wanted to buy $1,400 of bitcoin every week, should I buy $200 a day or should I buy the $1,400 every week?

Any options will be greatly appreciated.

Every week? How long, forever? It wouldn’t matter if you have unlimited capital. But because I believe you don’t have enough capital, always wait for a DIP, try to use your capital as efficient as possible. Don’t buy blindly like Michael Saylor did in 2021.

[tertius993]

Rationale:
1. You will (over time) benefit from the daily fluctuations in price
2. Assuming the buys are made on an exchange the only fees will be the exchange fees for each buy - these are likely to be on a percentage basis and therefore indifferent to one $1400 buy or seven $200 ones;
3. withdrawals to your wallet can be done weekly or monthly as you prefer to minimise network transaction fees

If you do Dollar Cost Averaging, you won't care too much about fluctuation.

Of course you do - its the whole point of buying on a DCA basis: you recognise that the price varies up and down (i.e. fluctuates) and so you spread your buys in order that sometimes you benefit from buying at a lower price.  If you didn't care about fluctuations in price you may as well just use your entire investment in one go and not bother to cost average.

There are two scenarios for DCA. One is when you have a lump sum of money to invest, and the other is how to invest your income over time.

Lump Sum Scenario

In the lump sum scenario, it can be shown that investing the lump sum at one time is the best strategy (on average). Of course, your return will vary depending on what happens after investment, and DCA would reduce that variance. However, DCA in this scenario has an opportunity cost which can easily outweigh that benefit.

Imagine that you invest portions of a lump sum over a year. You expect the price to increase over time, so consider how much more return you would have at the end of the year had if you didn't wait a whole year before investing those last portions.

This is correct, however, it is not the situation set out by the OP - he has $1400 per week to invest - the question is how best to allocate that weekly amount - single weekly buy or seven daily buys.  Given the daily volatility of bitcoin I argue that daily is likely to be more beneficial.   For example the high today (so far) is $47,555; yesterday the high was $50,102.

Moreover, if you expect the price to increase over time and never drop then there is almost no point in a DCA strategy, however, that isn't what we see in reality.  In reality there is an upward trend over very long periods but in the shorter term there is a high degree of volatility.  

To turn your example around, consider how much less you would have if you fully invested at the high in early November, versus DCA'ing over the following few weeks (indeed probably months).

Of course you can only know with hindsight what was the right strategy so it has to be based on probability.

[o_e_l_e_o]

But because I believe you don’t have enough capital, always wait for a DIP, try to use your capital as efficient as possible.

You are missing the point of DCA. The entire point of DCA is to not try to time to market; pick an amount and a time frame, and invest regardless of what the price is doing at the time. As soon as you try to time the market then you are no longer DCAing. If you want to do that, that's fine, but if you want to do DCA then you should see if you can set up automatic recurring buys so you don't even have to look at the market at the time of your purchases.

Given the daily volatility of bitcoin I argue that daily is likely to be more beneficial.

I would agree. Daily buying will get you closer to the overall average price of bitcoin than weekly buying will. If you assume bitcoin is going to continue on a overall upward trend, then over enough time daily will work out more profitable all other things being equal. However, as I mentioned in my first reply, the fees will not necessarily be equal and could result in significant differences.