I totally agree with you that DCA strategy is not recommended for newbies only but every one that tends to choose DCA strategy because of the way DCA strategy operates when it comes to Bitcoin investments but to frankly speaking with the DCA strategy it is newbies that cherish this DCA strategy because it permits them to invest with what they are afraid to lose to matter the time it will take to ba able to accumulate more Bitcoin and why some investors will find it difficult in making use of DCA strategy and will like to make use lump sum strategy because the patient in accumulating Bitcoin small small we not be there but to buy Bitcoin in bulk at once, so DCA strategy depends on how your discretionary income comes to you and the mindset to risk in a very long term.
newbies are the ones that tend to react too fast when it comes to volatility and dca requires discipline that some newbies may possess yet but if they want to build that discipline when it comes to investing they should at least learn dca
There are logical reasons why new investors react quickly. Some of the most important of these are:
- They are just learning about investment and accumulation Bitcoin and as a new investor to Learn more about volatile market.
A newbie to bitcoin may or may not be a new investor and may or may not be new to managing their cashflow. Just because a person is new to bitcoin, you cannot presume that they new to other investments and/or that they are new to cashflow management.
- Most new investors have a small amount of discretionary income/capital and therefore want to make a profit in a short time.
new bitcoin investors might be getting used to investing in bitcoin, yet some might have high levels of discretionary income and/or capital. There may be temptations to want to earn money quickly or even to have a trader mentality but even those traits should not be presumed as being dominant.
- Most new investors do not have a proper understanding of investing and therefore cannot decide which method is right. They have to take help from others to invest.
I suppose that you are correct that if they are new to investing, then they have to learn about investment techniques, and they might even need to learn the difference between investing and trading and also that bitcoin is the first thing that should be learned even though there are shitcoins out there and around the bitcoin space.
They might also need to learn cashflow management practices to complement their investing, presumptively into bitcoin.
- The most important weakness of new investors is that they are not very aware of the risks of investing, as a result of which their decisions are often quick and the decisions are not correct.
It seems that position size can be helpful in helping newbies to learn about managing their money and spending within their discretionary funds.. so that would help with at least investing no more than can be afforded to be lost.
In conclusion it can be said that if you are a new investor, use the DCA method with discretionary income and maintain a long term Bitcoin accumulation fix up. Educate yourself about the risks of investment. Learn more about Bitcoin investment with a DCA method.
Sure.. starting out with a small amount of DCA is probably helpful to learning along the way, even though it seems that before DCA is started, there is a determination that discretionary funds are available and to start to invest within the discretionary funds and making sure not to start out spending all of the discretionary funds since some kind of a cash cushion should be established and maintained, including determining if the start might be to invest a certain amount, whether $100 or $10 or some other amount, per week while getting used to the process and figuring out if the level of aggressiveness can be increased by looking at how much of the discretionary funds are going to be used for bitcoin investing, savings and/or discretionary consumption.
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I would add (sorry if this was already mentioned), to invest on the beginning (but also later) only what you are ready to loose. This transform your mindset and help you to manage the panic if market is falling down.
At least that helped me to went through all the FUD (Fear, Uncertainty, Doubt) during my learning path.
For sure your idea of investing no more than you can afford to lose is a very good starting idea, so then we realize that as long as we don't employ leverage, then the most that we could lose is 100% of what we put in, and even with that mentality, with the passage of time we can increase the aggressiveness of our bitcoin investment levels as we become more comfortable with both bitcoin and with our own cashflow management systems / practices.
When was your learning path fabrice.btc ? You have ONLY been registered here for about 2 months. Did you start investing in bitcoin before your registration date?
I see that you wrote a mini-guide that does not seem to be very "mini", so I will maybe need to look at your thread on the topic, and consider if there might be some ways of easily browsing to certain sections of it for certain topics that might be of interest.
This is what makes beginners used to responding in fear when bitcoin price in coming down, when they should have been ceasing those opportunities to buy in cheaper price.
And until there is a shift from dollar value to increasing bitcoin quantity, all dip will look like a problem, when it should have been a good chance.
Newbies will probably have to witness few dips and recoveries, in order to develop that thick skin of not always panicking whenever the market is undergoing correction, and realised that they are to make use of that opportunity that the market is offering them to accumulate more bitcoin. It will only take someone who has witnessed these scenarios several times to have that mind of buying more when the market is going down, a total newbie will never that. Unless that newbie has a mentor who's assuring him or her to accumulate more during the dip. But on their own they will never do that. That fear and panics are what makes them newbies.
Not all newbies to bitcoin lack cashflow management skills or even emotional control skills. One of the basics of investments is try to invest in a way that you DO NOT become emotional, so even a person who might have had started investing $100 per week in bitcoin during the Trump pump in late 2024 and early 2025, they would have had suffered a lot of ups and downs in the BTC price, and maybe they even had invested lump sum amounts at various BTC prices that are higher than our current price.
Let's say that such a person had an income of $30k and was investing $100 per week, and also maybe at various points in time, they took money from other investments that they had (let's say that they had an investment portfolio that was around $50k at the time that they came to bitcoin) yet they decided to take around 25% of their investment portfolio to invest into bitcoin (that would be $12,500. So in the last year through their DCA and through their various lump sums, maybe they have already invested close to $20k in bitcoin, yet maybe their average cost per BTC is around $100k (so they have pretty much been in the negative since mid-November), yet they keep buying bitcoin, since they are investing no more than they can afford to lose, and they are willing to take the heat and to keep on buying bitcoin.
Sure, I could flesh out the example a bit more, but you can use your imagination too.. to see that there can be newbies who have some experience and they do not necessarily need to panic, even if they might choose to start out investing somewhat aggressively and then currently their bitcoin holdings are in the negative, but they are not panicking, and they are continuing to buy $100 per week and maybe even considering if there might be some way that they might be able to increase their weekly buy amounts.
My point is that newbies need not panic or be inclined to panic merely because they are newbies.
surely newbies that has good orientation can navigate or develop thicker skin when it comes to understanding the market ups and downs and of course experience of the market will speaks much louder than never being in the market, newbies are vulnerable to panicking compared to those who has already gained experience about the market, newbies and experience investors will definitely have different levels of doubts and conviction and while anyone should only invest within their own level conviction and confidence which can increase with time.
I remember when I first started trading, I was much more cautious and didn't allow my trades to go into big losses. I constantly monitored the status of my trades and if anything uncertain, immediately exited them to avoid large losses. This worked for me, but it was very time-consuming. Later, I took a more relaxed approach to trading and mostly used stop-loss orders to spend less time monitoring. But ultimately, I came to the conclusion that hold Bitcoin was more profitable than trading.
I am glad that you finally learned that BTC trading tends to be a BIG ASS waste of time, energy and money, and that the way to go with bitcoin is to figure out ways to stack it until you have enough and/or more than enough.
Hypo 1 DCA $100 per week over the past 8-ish years starting from December 2017: Let's imagine that you had an income of $30k per year, and just imagine with your forum registration in late 2017, and if you had started investing aggressively in bitcoin, even at the top of the market, at around $100 per week, then you could have had invested around $43k, and you would have had around 2.8 BTC.. which would not have had been a bad place to be.
Hypo 2 DCA $580 per week between December 2017 and December 2019: If we imagine that you were a more well established investor and you had a couple years of your income that you had invested in other assets (prior to bitcoin), so then when you came to bitcoin, you decided to invest two years of your income into bitcoin over the next two years (between December 2017 and December 2019), then in that scenario you would have had invested $580 per week with a total of $61k invested and right around 9.1 BTC accumulated.. which surely would have put you into a better position than the first, even though in the second scenario you ended front loading your investment with a DCA approach over a period of 2 years rather than over 8-ish years.
