JJG’s Outline of Bitcoin Investment Ideas

[Mr Reporter]

The idea of the DCA being slow comes from people who want to go into investing with short term plans, if you are actually planning on the long run then DCA won't seem as slow, a simple look at probability will show that using an average amount from your discretionary income on a weekly basis for a few years will push your holdings a long way from where you started, this isn't even about the profit, it's just about how much you would have invested in bitcoin already by then, what this shows is that DCA isn't slow, it just seems like it.

An investor who even thought of DCA being slow is definitely aiming for short term gains and the short term investment is just about the profits. When an investor have long term mindset towards their bitcoin journey then such investor wouldn’t even see DCA as a slow strategy because such investors doesn’t need to worried about the journey being slow because it just about the long term so why in a rush.
 Seeing DCA as a slow strategy shows a little attributes of a traders mindset which is chasing after short term Profits and that not what we should prioritize.

Well from my own perspective i think anyone who looks DCA in every 5 minutes it should look so slow…well even buying bitcoin with an horizontal’s well most time when buying in the weekly or monthly it doesn’t feel slow enough…it feels boring in the best way. You’re not trying to time the bottom, you’re just accumulating more sats while everyone else is stressing….

[BluebloodCXVI]

Surely one of the main ways that our level of aggressiveness is measured is within our discretionary funds.  Guys who invest small amounts of their discretionary funds are investing whimpily and guys who are investing large amounts are investing aggressively.  There tends to be a range of choice, and how aggressive a person chooses to invest into bitcoin is a choice that they can try to stay consistent or they can vary every week.  It is the choice of each of us, within the scope of our discretionary funds. At the same time, I have some difficulties understanding how a guy could consider himself capable of investing aggressively without having back up funds.  That hardly makes any sense in terms of investing, even though it does make sense in terms of someone who wants to gamble with his bitcoin investment, which I would not recommend doing.

I get the point you're making Chief, especially the distinction you’re making between investing aggressively and simply taking unnecessary risks. I’d only add that aggressiveness isn’t just about how much of your discretionary funds you put into your investment, but a person's income stability, obligations, and risk tolerance also matter because two people can invest the same percentage into Bitcoin and still have very different levels of actual financial risk. Backup funds definitely make sense though, without some cushion, the line between investing and gambling can start getting blurry.

Surely, on many occasions we have discussed in this thread that we do not have to have our back up funds built prior to getting started investing in bitcoin.  We usually can start investing into bitcoin from where we are at, so long as we can figure out that we have discretionary funds, yet if we have absolutely no back up funds at the time that we get started, we cannot invest all of our discretionary funds, we have to use some of those funds to start building our back up funds.... so then as we are building and maintaining our bitcoin holdings in the weeks, months and years that come, we would be doing the same with our back up funds.. building and maintaining them... and we have to use judgement to figure out what is reasonable in terms of our current discretionary funds but also our expectations of our future discretionary funds.

I think that's a more practical way of looking at it because waiting until every financial box is perfectly checked before buying Bitcoin could mean some people will never even start. At the same time, there’s probably a balance to strike, building Bitcoin holdings and backup funds side by side makes better sense, but future discretionary income can sometimes be less predictable than we expect. So if someone becomes too dependent on expected future cash flow, they can end up overextending themselves which is not good. The judgment part you mentioned is probably the key factor because there isn’t really a one-size-fits-all percentage that will work for everyone.

Even if we are building our back up funds and our bitcoin investment at the same time, we better not be investing into bitcoin with absolutely no back up funds, even though sometimes there could be variance when we tap into those funds and then questions of how fast to build them back as compared with continuing to maintain and to build our bitcoin holdings.. These are judgement calls that each of us needs to make.. and if we screw it up, we are the ones that have to pay for our screw ups.  It would make little to no sense to try to be overly skimpy on the back up funds amount, even though maybe a guy could take several years to build up his bitcoin investment and his back up funds, yet perhaps if he has periods of absolutely zero back up funds, he may have to give greater emphasis to making sure that he has enough back up funds so that he can deal with any situations in which his income might go down and/or his expenses might go up and to guard against his investing beyond his discretionary funds.

I can see the reasoning there. Having no backup funds at all while building a Bitcoin position will surely increase the chances of a person being forced into bad decisions later in their investment , especially if income drops or unexpected expenses shows up. I’d only say that the right amount of backup funds can vary quite a bit between different people. Someone with stable income and fewer obligations may be comfortable with a smaller cushion, while someone with more uncertainty might need a larger one. The important part seems less about hitting a specific number and more about avoiding a situation whereby your investment strategy depends on everything going according to plan.

So many times I mention that guys need to have and deploy common sense in regards to their investing into bitcoin and also their attempts to manage their cashflows and to making sure that they are building strong cashflow systems/practices, which surely includes the building and maintenance of back up funds, and guys have to use common sense to figure out how to accomplish all of these matters in ways that are reasonable to their individual circumstances and their assessment of their individual circumstances.. and sometimes they need to slow down and sometimes they need to learn, and I would imagine that common sense would help to guide normal folks in their getting involved in bitcoin and also their investment in bitcoin and their strengthening of their cashflow management systems/practices.

I agree that common sense matters, but I also think common sense can mean different things depending on a person’s experience and financial situation. What seems obvious to someone who has spent years managing investments may not be obvious to someone that is just getting started and that’s probably why principles like budgeting, backup funds, and staying within discretionary income are useful, because they provide some structure when experience or judgment is still developing. So personally i believe learning and adjusting over time is likely just as important as relying on common sense alone.

And yeah, maybe we are not very accustomed to using our common sense to work out problems and to exercise good judgement, and surely if we might be new to investing and managing our cashflows, then we may well have to error on the side of caution as we get used to these new kinds of activities.. and I personally tend to presume that guys tend to operate with a bit of a cash cushion in their own ways of dealing with their income and their expenses (maybe they have 2-6 weeks of their expenses that they keep as a cushion?), even prior to investing in bitcoin, yet once they are investing in bitcoin, there is more reason to manage cashflows better and to keep more back ups funds (whether they are all in cash or not, the basic 1st month or so should be in cash in the local currency), since bitcoin tends to be very liquid and very volatile, so guys can be tempted to sell their bitcoin or fail to ongoingly buy bitcoin based on their own failures in their cashflow management (and their building and maintenance of back up funds).

I think the point about Bitcoin exposing weaknesses in cashflow management is interesting. When an asset is highly liquid and volatile, poor financial habits can become more visible because people may feel pressure to sell during difficult periods or stop accumulating altogether. I’d only add that not everyone starts from the same financial position, some people already operate with a cushion, while others are building their own from the scratch. So caution makes sense early on, but there’s also a balance, if someone becomes overly focused on building larger and larger backup funds, they could end up delaying investing indefinitely. The challenge is finding a level of preparedness that reduces unnecessary risk without creating paralysis.

[Ryu_Ar1]

Perhaps it’s not necessary to accumulate bitcoin using the DCA techniques when you have a huge amount of discretionary income, perhaps it’s also necessary you stick with buying bitcoin through the DCA techniques when you don’t have a very large amount of discretionary income.

There are investors who combine buying through DCA and lump sum, personally I don’t really appreciate buying bitcoin through the DCA or lump sum, I would appreciate buying through the DCA because it makes me more comfortable in buying and accumulating bitcoin.

The benchmark lies not in how big or small the discretionary funds are in the end but we must look at our readiness to buy because even if our discretionary funds are large but we are not sure about the amount of purchases made it will also not end well because you do not have readiness to buy whereas when talking about investing in bitcoin from the start we must be prepared for the risk of loss so in this case you need to see how much money we can spend and you are ready for the consequences in undergoing the process that exists for the long term.
Indeed, there will be an assumption that when our discretionary funds are large it will be better for us to invest in bitcoin because it can be bigger too but when we are not ready for that then why be forced because after all, apart from the money to buy there is a mentality that must be considered here so that when you buy bitcoin (even though using discretionary funds) it actually puts mental pressure on yourself because you are not ready for it.

Making several purchases with different methods also depends on the readiness we have if we feel we are ready and able to buy then it is very doable because there is nothing wrong with that but if we are only ready to buy with 1 method such as DCA or other methods then it is also not a mistake because the most important thing here is to buy and do it for the long term.

[The Founding Titan]

The idea of the DCA being slow comes from people who want to go into investing with short term plans, if you are actually planning on the long run then DCA won't seem as slow, a simple look at probability will show that using an average amount from your discretionary income on a weekly basis for a few years will push your holdings a long way from where you started, this isn't even about the profit, it's just about how much you would have invested in bitcoin already by then, what this shows is that DCA isn't slow, it just seems like it.

An investor who even thought of DCA being slow is definitely aiming for short term gains and the short term investment is just about the profits. When an investor have long term mindset towards their bitcoin journey then such investor wouldn’t even see DCA as a slow strategy because such investors doesn’t need to worried about the journey being slow because it just about the long term so why in a rush.
 Seeing DCA as a slow strategy shows a little attributes of a traders mindset which is chasing after short term Profits and that not what we should prioritize.

Well from my own perspective i think anyone who looks DCA in every 5 minutes it should look so slow…well even buying bitcoin with an horizontal’s well most time when buying in the weekly or monthly it doesn’t feel slow enough…it feels boring in the best way. You’re not trying to time the bottom, you’re just accumulating more sats while everyone else is stressing….

Anyone who is investing in bitcoin doesn't need to constantly be checking to see if the price has increased or if they've already started making profit, if a person is DCAing then the only time they should check the price of bitcoin is when they are buying their regular bitcoins and this is only because to buy bitcoin they need to know what it is worth at the time (for me at least) but beyond that point there is no need to constantly be checking the price of bitcoin.

[Grease5000]

The idea of the DCA being slow comes from people who want to go into investing with short term plans, if you are actually planning on the long run then DCA won't seem as slow, a simple look at probability will show that using an average amount from your discretionary income on a weekly basis for a few years will push your holdings a long way from where you started, this isn't even about the profit, it's just about how much you would have invested in bitcoin already by then, what this shows is that DCA isn't slow, it just seems like it.

An investor who even thought of DCA being slow is definitely aiming for short term gains and the short term investment is just about the profits. When an investor have long term mindset towards their bitcoin journey then such investor wouldn’t even see DCA as a slow strategy because such investors doesn’t need to worried about the journey being slow because it just about the long term so why in a rush.
 Seeing DCA as a slow strategy shows a little attributes of a traders mindset which is chasing after short term Profits and that not what we should prioritize.

Well from my own perspective i think anyone who looks DCA in every 5 minutes it should look so slow…well even buying bitcoin with an horizontal’s well most time when buying in the weekly or monthly it doesn’t feel slow enough…it feels boring in the best way. You’re not trying to time the bottom, you’re just accumulating more sats while everyone else is stressing….

You are right and that’s exactly how I see it, it’s supposed to feel boring. If I catch myself checking charts every few minutes, I know I’m shifting into a trader mindset.  What I do is i just stick to my schedule and ignore the noise.

Honestly, that boring routine is what’s been working for me  no stress, just steady accumulation.

[Brizi5000]

The idea of the DCA being slow comes from people who want to go into investing with short term plans, if you are actually planning on the long run then DCA won't seem as slow, a simple look at probability will show that using an average amount from your discretionary income on a weekly basis for a few years will push your holdings a long way from where you started, this isn't even about the profit, it's just about how much you would have invested in bitcoin already by then, what this shows is that DCA isn't slow, it just seems like it.

An investor who even thought of DCA being slow is definitely aiming for short term gains and the short term investment is just about the profits. When an investor have long term mindset towards their bitcoin journey then such investor wouldn’t even see DCA as a slow strategy because such investors doesn’t need to worried about the journey being slow because it just about the long term so why in a rush.
 Seeing DCA as a slow strategy shows a little attributes of a traders mindset which is chasing after short term Profits and that not what we should prioritize.

Well from my own perspective i think anyone who looks DCA in every 5 minutes it should look so slow…well even buying bitcoin with an horizontal’s well most time when buying in the weekly or monthly it doesn’t feel slow enough…it feels boring in the best way. You’re not trying to time the bottom, you’re just accumulating more sats while everyone else is stressing….

theres no point looking at the market price every 5 minutes if you are already investing with the dca when all you just have to do is to focus on figuring a discretionary income to use and buy bitcoin regularly at any market price. anyone who thinks the dca is slow or boring  is contradicting the whole idea of the dca because the truth is that the dca is not slow nor boring, as a matter of fact it is regarded as the most effective strategy of accumulating bitcoin because it encourages regular and consistent buy where by you dont need to wait for any market price before you can buy bitcoin, you dont also need to wait until you have a huge amount of cash before you can buy with the dca as you can buy regularly at any market price and with just a discretionary income available to you. all you need to do is just to figure out a discretionary income to use and buy bitcoin either weekly or monthly basis or depending on anytime your discretionary income is available. and it still allows you to buy aggressively at some point if you have the financial muscle to do so with your discretionary income and improve your portfolio.

[Joeboy]

Anyone who is investing in bitcoin doesn't need to constantly be checking to see if the price has increased or if they've already started making profit, if a person is DCAing then the only time they should check the price of bitcoin is when they are buying their regular bitcoins and this is only because to buy bitcoin they need to know what it is worth at the time (for me at least) but beyond that point there is no need to constantly be checking the price of bitcoin.

Just coz you are against checking the price of Bitcoin dosen't mean that everyone must follow suit... Everyone is always entitled to do whatever they feel is best for their investments... And some folks feel much more relaxed and comfortable when they checking the price either in a weekly basis...Checking the price for profit is very wrong , however there could be other reasons why folks check the price like some actually check the price, so they can stay informed in what is going on in the market....What matters the .most isn't how frequent folks check their prices, but instead on whether folks can still go ahead to maintain their steady investments without stopping their investments either because price movement or coz they I tend to take profits...

[avp2306]

Even a person who might have had been investing $100 per week for years and years and years, he might find himself into a situation in which he suddenly has more money (such as he has an extra $2k), so then maybe he decides to invest $500 per week for the next 5 weeks in order to accommodate his having the extra $2k.

Yes, buddy, it's very realistic. In addition to doing regular DCA (Dollar Cost Averaging), when additional funds come in, it is wisest to invest them in 5-10 weeks (Enhanced DCA) rather than investing them in the market all at once. If you invest a large amount of lumpsum at any high price in a bull market, you will regret it later. Instead, if you maintain a cash cushion in a volatile market according to the strategy you mentioned, the portfolio is much more secure and the average buying price is also under control.

I was not proclaiming that spreading $2k over 5 weeks was the smartest or the best way to deal with getting an extra $2k, even though I was asserting that when a guy receives an extra $2k, like in the example that I gave, then the guy has options in terms of how he might choose to deploy such extra $2k that he has available.  Spreading it out over 5 weeks is one of the options, and other options are available - which is one of the good things when we have extra money and we also have already put a practice of bitcoin buying in place.

Another point that I was making is that if a guy had already been investing at $100 per week for 5 years, then he would have had already invested $26k over those 5 years, so even though the guy might invest $500 rather than $100 for the next 5 weeks based on his having had received the $2k extra, that larger portion of investment (a total of $2k extra) is not likely to make a large difference to his overall bitcoin portfolio - which is further the case if the BTC price had gone up during those 5 years (for example in the last 3.5 years, we might say that the BTC price went up 3.5x from $20k-ish to $75k-ish).  In any case if the guy's bitcoin portfolio had appreciated in value, even by 2.5x, then his portfolio had become $65k as compared with the $26k that he had put in, yet when he puts an additional $2k into his holdings, it is only around 3% of the total value of his holdings.  

The same is true the longer and longer that we are in bitcoin.  It is likely that our additional contributions become a smaller and smaller part of our holdings.  Think about a guy who had been investing $100 per week 10 years and he put $52k into his bitcoin investment, and perhaps the bitcoin went up by more than 5x or maybe even 10x, and so if he continues to invest $100 per week, it does not seem like a large amount as compared to the total dollar value of his holdings.

In the beginning, and even the first few years, it may well seem that the BTC holdings are growing with each investment, yet after several years, the amount of growth might seem slower and slower, even if with the passage of more years, guys might increase their BTC investment amounts based on increased income and/or increased discretionary funds being available.

True, since if they are consistently doing DCA for lots of years. That $2k will be not as huge compare on the overall portfolios that they owned.

This is actually the best thing about compounding since they may feel heavy at early phase, but when they are on it for lots of years they may feel its normal and those accumulations phases feel's light.
What's actually the best part their is those extra funds they have offer them flexibility. On which they can hold it back depends if they are comfortable to do it, spread out or even do front load. Their discipline towards being consistent with their accumulations matters more than doing any single lump sum.

[JayJuanGee]

[edited up]

I agree that common sense matters, but I also think common sense can mean different things depending on a person’s experience and financial situation. What seems obvious to someone who has spent years managing investments may not be obvious to someone that is just getting started and that’s probably why principles like budgeting, backup funds, and staying within discretionary income are useful, because they provide some structure when experience or judgment is still developing. So personally i believe learning and adjusting over time is likely just as important as relying on common sense alone.

You don't seem to understand what is common sense, since common sense would not suggest any specific knowledge or that you just sit back and not learn anything, yet any person who has common sense would be able to learn all of the skills related to bitcoin investing and cashflow management, even though he might well make quite a few mistakes within the learning journey.

Common sense says that if you don't know how to calculate whether you have discretionary funds or if you have enough funds to buy bitcoin, either you invest a small amount or you practice with your math to make sure that you are comfortable.

Common sense says that if you have no information about how to get bitcoin, then maybe you need to figure out the various ways to get bitcoin and decide how you might want to start out.

Common sense says that you would likely prefer to not lose money, so you may well consider that if you might be brand new to bitcoin and you don't know very much about it, then you would likely error on the side of investing smaller amounts while you are learning about it,and you would not increase the amount until you learn some specifics that might help to satisfy you in light of your own cashflow management experiences and/or in consideration if you have any investing experiences.

I am presuming that around 97% of people have sufficient common sense to be able to invest into bitcoin, yet the mere fact that they have common sense and that they have discretionary income does not mean that they are personally ready to get started, since they need to also be psychologically ready.. not just financially ready... even though at the same time, if a person clearly determines that he has $100 in discretionary funds that are available each week that he knows could be invested into bitcoin, then I find it hard to suggest that he should wait when he can start out with $30 per week and then spend time learning about whatever areas he believes that he needs to learn in order to become more comfortable and to be able to increase the amount from $30 to $100 per week.  Yet, at the same time, if he does not have any time to look into bitcoin further, then perhaps he has to keep his investment amount at $30 per week until he is able to gardner up enough time to be able to look into any bitcoin-related areas (and/or cashflow management related areas) that he might need to look into.

And yeah, maybe we are not very accustomed to using our common sense to work out problems and to exercise good judgement, and surely if we might be new to investing and managing our cashflows, then we may well have to error on the side of caution as we get used to these new kinds of activities.. and I personally tend to presume that guys tend to operate with a bit of a cash cushion in their own ways of dealing with their income and their expenses (maybe they have 2-6 weeks of their expenses that they keep as a cushion?), even prior to investing in bitcoin, yet once they are investing in bitcoin, there is more reason to manage cashflows better and to keep more back ups funds (whether they are all in cash or not, the basic 1st month or so should be in cash in the local currency), since bitcoin tends to be very liquid and very volatile, so guys can be tempted to sell their bitcoin or fail to ongoingly buy bitcoin based on their own failures in their cashflow management (and their building and maintenance of back up funds).

I think the point about Bitcoin exposing weaknesses in cashflow management is interesting. When an asset is highly liquid and volatile, poor financial habits can become more visible because people may feel pressure to sell during difficult periods or stop accumulating altogether. I’d only add that not everyone starts from the same financial position, some people already operate with a cushion, while others are building their own from the scratch.

If a person has an income of $30k per year and he decides to invest $100 per week into bitcoin (17.3%), then maybe after 5 years he had invested $26k into bitcoin, and if bitcoin suddenly goes up 5x to be worth $130k in a fairly short period of time, the guy might not know how to deal with that situation.  Is he going to keep buying bitcoin?  Stop buying bitcoin? Or is he going to be tempted to sell some of his bitcoin?

Maybe he never had any investment that was worth that much money, so he has to learn how to deal with having that money and knowing that the price is volatile and that he can sell the bitcoin at any time that he wants.  Building up a habit of ongoingly buying bitcoin can help in these circumstances, but also building up back up funds can help in these types of circumstances, too.

So caution makes sense early on, but there’s also a balance, if someone becomes overly focused on building larger and larger backup funds, they could end up delaying investing indefinitely. The challenge is finding a level of preparedness that reduces unnecessary risk without creating paralysis.

Hopefully newbies who are involved in this thread are figuring out ways to get started investing in bitcoin, and simultaneously building their back up funds and ultimately acting rather than waiting.  So guys have to figure out how to help themselves and to figure out their position size in regards to bitcoin whether they are buying weekly or otherwise, and sure at the same time making sure to build and maintain some quantity of back up funds.

[edited out]

True, since if they are consistently doing DCA for lots of years. That $2k will be not as huge compare on the overall portfolios that they owned.

This is actually the best thing about compounding since they may feel heavy at early phase, but when they are on it for lots of years they may feel its normal and those accumulations phases feel's light.
What's actually the best part their is those extra funds they have offer them flexibility. On which they can hold it back depends if they are comfortable to do it, spread out or even do front load. Their discipline towards being consistent with their accumulations matters more than doing any single lump sum.

It cuts both ways, and if guys are not consistently buying, then after a while they might start to feel that they no longer need to buy because each small amount that they buy is not adding very much value to the overall bitcoin stack size.  Whether they are making an appropriate assessment is not always clear, since there may well be guys who stacked coins for several years, yet they ended up stopping or slowing down their stacking, so it ends up taking them way longer than it should have had taken to get to a point of overaccumulation.

Think about two guys who started out investing $100 per week into bitcoin 10 years ago (in April 2016), and after their first year, they invested $5,200 and they had accumulated 8 bitcoin.

Maybe the first guy stops buying because he figures that he has enough and he doesn't really want to keep buying bitcoin when the prices are much higher than when he started.

The second guy continues to buy bitcoin at $100 per week for the next 9 years from April 1, 2017 until now, so he invested another $48k and got another 4.2 BTC, so he  had invested a total of $53,200 and his total bitcoin is 12.2, and the first guy still just has 8 bitcoin (to the extent that he was able to hang onto the 8 BTC), yet the first guy ONLY invested $5,200.

Which guy would you rather be?

It is not uncommon for some guys to give up stacking bitcoin early, and sometimes they even will sell parts of their stash so guy 1 might not have had been able to hang onto 8 whole bitcoin for 9 years, and guy 2 just continued to stack in order to get to 12.2 BTC, which seems to have had put him in a way better position than guy 1, even though he invested 10x more than guy 1, and he only got 50% more bitcoin.. yet there seems to be some value in continuing to plod away in terms of staying focused on ongoing buying.

[Jody.Drummer]

Well from my own perspective i think anyone who looks DCA in every 5 minutes it should look so slow…well even buying bitcoin with an horizontal’s well most time when buying in the weekly or monthly it doesn’t feel slow enough…it feels boring in the best way. You’re not trying to time the bottom, you’re just accumulating more sats while everyone else is stressing….

You are right and that’s exactly how I see it, it’s supposed to feel boring. If I catch myself checking charts every few minutes, I know I’m shifting into a trader mindset.  What I do is i just stick to my schedule and ignore the noise.

Honestly, that boring routine is what’s been working for me  no stress, just steady accumulation.

In my opinion, it is pointless to monitor the movement of the chart every minute, if we really intend to invest and have done it with an understood strategy such as DCA then checking it every minute is pointless, because it is better to just focus on the income that must be obtained to meet the needs and budget that must be invested in BTC because with the DCA strategy that is done this is better done consistently in terms of time and budget. And I agree with what you said, when we check it with a few minutes it's more like trading not investing.

[cyberninja2]

Anyone who is investing in bitcoin doesn't need to constantly be checking to see if the price has increased or if they've already started making profit, if a person is DCAing then the only time they should check the price of bitcoin is when they are buying their regular bitcoins and this is only because to buy bitcoin they need to know what it is worth at the time (for me at least) but beyond that point there is no need to constantly be checking the price of bitcoin.

What they need to see is the movement of market conditions regarding the price. This is because someone's goal in checking the price is to make a purchase. In my opinion, it's perfectly appropriate for someone to check the price of Bitcoin. Basically, they're checking with the intention of buying Bitcoin, not just for the sake of making a profit. For them, those profits will always be felt as long as they continue to accumulate Bitcoin, whether regularly or not. Clearly, buying Bitcoin is more important than checking the market to see if there's a profit or not.
For those who accumulate Bitcoin, it is appropriate to examine market conditions regarding the prices that occur when they want to buy Bitcoin with the aim of accumulating it for the long term. So after they see market conditions, they are sometimes more motivated to buy Bitcoin in an amount based on their cash flow.

[ZeroVinsonN]

The idea of the DCA being slow comes from people who want to go into investing with short term plans, if you are actually planning on the long run then DCA won't seem as slow, a simple look at probability will show that using an average amount from your discretionary income on a weekly basis for a few years will push your holdings a long way from where you started, this isn't even about the profit, it's just about how much you would have invested in bitcoin already by then, what this shows is that DCA isn't slow, it just seems like it.

An investor who even thought of DCA being slow is definitely aiming for short term gains and the short term investment is just about the profits. When an investor have long term mindset towards their bitcoin journey then such investor wouldn’t even see DCA as a slow strategy because such investors doesn’t need to worried about the journey being slow because it just about the long term so why in a rush.
 Seeing DCA as a slow strategy shows a little attributes of a traders mindset which is chasing after short term Profits and that not what we should prioritize.

And that's why it's better to be in bitcoin investment for the long term than to come into it with short term goals, the paranoia that comes with short term investment can lead to a lot of mistakes, once a person starts thinking about short term gains they start being affected by every price change they experience, they are bothered by every little swing and when every little thing bothers you, you can't focus on what's important, holding becomes difficult and they end up selling early even at a loss.

[Princess Leah]

In my opinion, it is pointless to monitor the movement of the chart every minute, if we really intend to invest and have done it with an understood strategy such as DCA then checking it every minute is pointless, because it is better to just focus on the income that must be obtained to meet the needs and budget that must be invested in BTC because with the DCA strategy that is done this is better done consistently in terms of time and budget. And I agree with what you said, when we check it with a few minutes it's more like trading not investing.

Monitoring the price movements of the charts is one criteria of a trader so investors shouldn't do that cause it's unnecessary, they're buying to hold for long-term so there's no reason to keep monitoring charts expect the person is a trader in the guise of an investor cause that's what many so called investors are of lately.

 I'll rather advise maybe newbie investors who do that to channel that energy of monitoring charts to focus more on accumulation or try increase their discretionary to accumulate more cause at the end monitoring charts would only lead to making emotional decisions that would ruin the accumulation journey.
 

[GhostOfBitcoin]

-snip-

I was not proclaiming that spreading $2k over 5 weeks was the smartest or the best way to deal with getting an extra $2k, even though I was asserting that when a guy receives an extra $2k, like in the example that I gave, then the guy has options in terms of how he might choose to deploy such extra $2k that he has available.  Spreading it out over 5 weeks is one of the options, and other options are available - which is one of the good things when we have extra money and we also have already put a practice of bitcoin buying in place.

Another point that I was making is that if a guy had already been investing at $100 per week for 5 years, then he would have had already invested $26k over those 5 years, so even though the guy might invest $500 rather than $100 for the next 5 weeks based on his having had received the $2k extra, that larger portion of investment (a total of $2k extra) is not likely to make a large difference to his overall bitcoin portfolio - which is further the case if the BTC price had gone up during those 5 years (for example in the last 3.5 years, we might say that the BTC price went up 3.5x from $20k-ish to $75k-ish).  In any case if the guy's bitcoin portfolio had appreciated in value, even by 2.5x, then his portfolio had become $65k as compared with the $26k that he had put in, yet when he puts an additional $2k into his holdings, it is only around 3% of the total value of his holdings.  

Your math is perfect. When the portfolio matures after 5 years of DCA, the new $2,000 doesn't make much of a difference in overall value (only 3%). This phenomenon is called the "Law of Diminishing Returns" in portfolio theory.

At this point, it is wiser to keep the excess money as 'dry powder' or liquid cash until the market goes into a deep dip, rather than distributing it to regular DCA over the next 5 weeks. When Bitcoin crashes by 30% or 40%, this $2,000 lump-sum investment will help to bring down the average buy price of a large portfolio more effectively. But I agree with you, whatever the strategy, having surplus funds gives an investor the biggest psychological advantage in the market.

I am glad that you seem to have had learned from your experience, and overdoing it on dips (increasing the level of aggressiveness on dips) seems to be a common inclination that guys want to do, but then they may well end up overdoing it when the increase their level of aggressiveness based on bitcoin price dips and then they end up stressing themselves and/or even scrambling if they end up coming accross circumstances in which their income goes down and/or their expenses go up.. so then the guys who put themselves into such a situation may well end up with way less cash, and either they have to stop buying bitcoin, use up the remaining of their back up funds or worse yet if they end up having to sell some or all of their bitcoin to be able to deal with their period of cashflow shortfall issues.  

My friend @JayJuanGee, you have mentioned a very accurate and realistic risk. I too faced this exact same bitter experience from my previous mistake. After being overly aggressive and exhausting my backup fund, when a small family emergency comes up, I understand how dire a liquidity crisis can be.Emotionally buying too much in the deep blocks the fiat cash flow, which then creates the mental pressure to panic sell or sell at a loss. Although Bitcoin is the best asset in the long run, our daily lives are run in fiat currency. Therefore, it is important to keep an inviolable 'Emergency Fund' and 'DCA Capital' separate by following strict financial discipline. This mathematical control is the only way to survive in the market and maintain peace of mind. Your valuable addition has enriched my learning process.

[Barikui1]

Monitoring the price movements of the charts is one criteria of a trader so investors shouldn't do that cause it's unnecessary, they're buying to hold for long-term so there's no reason to keep monitoring charts expect the person is a trader in the guise of an investor cause that's what many so called investors are of lately.

 I'll rather advise maybe newbie investors who do that to channel that energy of monitoring charts to focus more on accumulation or try increase their discretionary to accumulate more cause at the end monitoring charts would only lead to making emotional decisions that would ruin the accumulation journey.
 

I don't see it as a big deal looking at the market periodically to know what's happening in the market, because it's only when you take a look at what's going on there , and you will get to know when their is a dip or not, but what I think that is wrong is staying glue to the chart, like constantly monitoring it's hourly, that's the trait of a trader, and by doing so you might temper or sell your Bitcoin investment in panic if your emotions gets the better of you.

So checking on the value of Bitcoin to see what's happening in the market is not bad, but doing it in excess like staying glue to the chart is where it's totally wrong.

[alankasman]

And that's why it's better to be in bitcoin investment for the long term than to come into it with short term goals, the paranoia that comes with short term investment can lead to a lot of mistakes, once a person starts thinking about short term gains they start being affected by every price change they experience, they are bothered by every little swing and when every little thing bothers you, you can't focus on what's important, holding becomes difficult and they end up selling early even at a loss.

More often than not things don't go as we want if we make short-term investments and this often happens to those who prefer to invest in the short term even though they know that long-term investments are better than short-term ones. But we also have to think about why they choose to use the short term. Perhaps for me they are from the condition of their weekly or monthly income sources which are classified as very limited financially so they prefer to invest in the short term. And this is not because they don't want a long-term investment so for me it's more likely that the income they have that's why they invest in the short term even though they know that the method they use is the last resort for people who lack financial means.

Making long-term investments is a very appropriate step but behind it all many parties do not want that method but because of the greater need to spend they do not do it because they feel more anxious about the needs when they force themselves to continue doing long-term which in the end they are also unable to hold back from selling but with the forced situation that makes them still have to sell the amount they have done on Bitcoin accumulation when their goal is to make long-term investments so one of the obstacles for all parties is because of their finances which makes them not use long-term Bitcoin investments.

[Moreno233]

And that's why it's better to be in bitcoin investment for the long term than to come into it with short term goals, the paranoia that comes with short term investment can lead to a lot of mistakes, once a person starts thinking about short term gains they start being affected by every price change they experience, they are bothered by every little swing and when every little thing bothers you, you can't focus on what's important, holding becomes difficult and they end up selling early even at a loss.

Those who come into Bitcoin with short term plans are simply traders because what they do is trading which is taking high and unnecessary risk with the hope of making quick profits. The market being a big and complex market does not always allow them to get away with that impatience.

Those that are considered real investors are those who buy, irrespective of the price, and hold for the future. They are not eager to sell neither are the constantly monitoring the market to know when to exit. Instead of thinking about selling, they will be planning on how to accumulate more Bitcoin which is exactly what JJG recommended in this thread.

[liasbaa]

Well from my own perspective i think anyone who looks DCA in every 5 minutes it should look so slow…well even buying bitcoin with an horizontal’s well most time when buying in the weekly or monthly it doesn’t feel slow enough…it feels boring in the best way. You’re not trying to time the bottom, you’re just accumulating more sats while everyone else is stressing….

You are right and that’s exactly how I see it, it’s supposed to feel boring. If I catch myself checking charts every few minutes, I know I’m shifting into a trader mindset.  What I do is i just stick to my schedule and ignore the noise.

Honestly, that boring routine is what’s been working for me  no stress, just steady accumulation.

In my opinion, it is pointless to monitor the movement of the chart every minute, if we really intend to invest and have done it with an understood strategy such as DCA then checking it every minute is pointless, because it is better to just focus on the income that must be obtained to meet the needs and budget that must be invested in BTC because with the DCA strategy that is done this is better done consistently in terms of time and budget. And I agree with what you said, when we check it with a few minutes it's more like trading not investing.

There is no need to watch at price charts for long term Bitcoin investing. No matter how much I advise you not to look at charts, you may not be able to stop yourself because this is a natural thing that happens to me. Checking charts can be a kind of mental habit because monitoring the movement of the asset is the responsibility of many investors.
Who watch charts for trading purposes do it countless times a day, but for investors, it is unnecessary because their goal is long-term and they continue to accumulate Bitcoins regardless of price movements. Watching at price charts is not negative for you if you do not feel pressured to withdraw your Bitcoin holdings.

[B-BossMan]

[edited out]

True, since if they are consistently doing DCA for lots of years. That $2k will be not as huge compare on the overall portfolios that they owned.

This is actually the best thing about compounding since they may feel heavy at early phase, but when they are on it for lots of years they may feel its normal and those accumulations phases feel's light.
What's actually the best part their is those extra funds they have offer them flexibility. On which they can hold it back depends if they are comfortable to do it, spread out or even do front load. Their discipline towards being consistent with their accumulations matters more than doing any single lump sum.

It cuts both ways, and if guys are not consistently buying, then after a while they might start to feel that they no longer need to buy because each small amount that they buy is not adding very much value to the overall bitcoin stack size.  Whether they are making an appropriate assessment is not always clear, since there may well be guys who stacked coins for several years, yet they ended up stopping or slowing down their stacking, so it ends up taking them way longer than it should have had taken to get to a point of overaccumulation.

Think about two guys who started out investing $100 per week into bitcoin 10 years ago (in April 2016), and after their first year, they invested $5,200 and they had accumulated 8 bitcoin.

Maybe the first guy stops buying because he figures that he has enough and he doesn't really want to keep buying bitcoin when the prices are much higher than when he started.

The second guy continues to buy bitcoin at $100 per week for the next 9 years from April 1, 2017 until now, so he invested another $48k and got another 4.2 BTC, so he  had invested a total of $53,200 and his total bitcoin is 12.2, and the first guy still just has 8 bitcoin (to the extent that he was able to hang onto the 8 BTC), yet the first guy ONLY invested $5,200.

Which guy would you rather be?

 I really love this nice comparisons because this is clearly show/tells the difference between stopping early and continue staying consistent with bitcoin accumulation. If I were to choose among the two methods or guys, I would definitely prefer to be second guy, this example is very simple but it a very powerful comparison between the two bitcoin investors who actually began from same point but ended up with different outcomes because of thier mindset and consistency.

However, the first guy was smart enough to buy early and managed to accumulate 8 Bitcoin with just only $5,200 which is very impressive, but the mistakes he made was, he was descieved by the high price and has discouraged him from continuing his weekly bitcoin buying, he just assume the bitcoin has already expensive. So he stop stacking...I guess.

Moreover, the very good lesson here is that stopping early because of fear of higher prices can cost an investor a massive future profits, so consistent Dollar-Cost Averaging DCAover time usually rewards patience and also conviction.

[Bright0515]

More often than not things don't go as we want if we make short-term investments and this often happens to those who prefer to invest in the short term even though they know that long-term investments are better than short-term ones. But we also have to think about why they choose to use the short term. Perhaps for me they are from the condition of their weekly or monthly income sources which are classified as very limited financially so they prefer to invest in the short term.

It's not whether their income is low or high, I think the problem they are having is lack of discipline, or let's say that they don't have the courage to go for long term investment, meanwhile long term investment is far more better than short term investment. Based on my point of view, I think those who go for short term investment are likely to be traders and not investor.
Actually, the hold part of your comment sounds more like you are implying that all low income eaners are short term investors mean while there are many investors who don't earn up to a thousand dollar per month and they are still accumulating Bitcoin. I guess low income earners don't have any excuses to why they don't want to buy Bitcoin, because it's either they don't have discretionary income or they are not disciplined to get started.

Actually , I'm certain that most of those people who chooses short term investment are likely to be greedy, impatient and they also have the desire to earn quick profit. No matter how low your cash flow may be, you should at least figure out your discretionary income, but first you should at least settle all bills and also keep some funds aside for emergency situations during your investment.

Many people literally thinks that long term investment is impossible for them because they earn low income, but the simple truth is that it's very possible for anyone to invest into Bitcoin, no matter how low your income may be, so long as you have settled all necessary expenses including emergency funds, and you have some leftover money which is also known as your discretionary income, you can buy Bitcoin with it through DCA strategy. DCA method even helps those who have low income (but anyone can also use it), if your income is low you can DCA into Bitcoin.