DCA can help you in reducing the risk involved in Bitcoin investment. Bitcoin investment has its own risks and we have to manage these risks.
DCA helps you eliminate the pressure of having to invest large discretionary income into bitcoin at once by allowing you to buy with any amount from your discretionary income, over a long period of time, hence you must not buy 1BTC at once, but can invest even if it is $100 weekly consistently over a longer period of time and still stand a chance of meeting your target of same 1BTC, and the best part is that you don't feel the financial pressure you would've been through if you were to buy it all at once.
Like if you have a capital and you invest all that capital in Bitcoin in last October when Bitcoin price was at 120,000$ then your invested money will still be at loss but if you invest that capital through DCA strategy then you can have a reasonable average buying price.
You are thinking of short-term and it is not a good thought process for an investor, if such an investor had planned to hold for long, then they would be in a good position in the future if bitcoin continues doing well. if such an investor lump summed in October and followed up his investment journey with regular DCA and would not sell in a short-term, then he is still in a good practice since he is still adding to his stash and getting closer to his accumulation target.
The chances seem quite low that even a person investing $200 per week into bitcoin over the next 10 years would accumulate a whole BTC, $200 per week would be $10,400 over 1 year and $104k over 10 years.
Even though it is possible, it is quite unlikely that the average cost per BTC would be $104k or less over the next 10 years.. so it seems pie in the sky even with $200 per week to expect to accumulate 1 bitcoin in the next 10 years.
Over time, we need to increase our investment budget, because as time goes by, the value of money decreases, and the value of our domestic fiat currency decreases. So we must also increase our discretionary income and increase the amount of Bitcoin we invest in weekly. If we are investing in Bitcoin for the long term, then we must increase our Bitcoin investment over time so that we can eventually buy one Bitcoin.
Even if there are good goals to increase income and increase discretionary income, not everyone is in a position to increase their discretionary income, whether we are referring to age or even other aspects related to making money... but yeah, if it is possible to increase discretionary income by increasing income and/or decreasing expenses, then there can be more abilities to buy more bitcoin with the extra money that comes available.
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If you can accumulate more Bitcoins overtime during this period, it may be possible to get a full Bitcoin. Your income will increase further in the next 10 years and you can accelerate this growth rate further if you can develop multiple sources of income by gaining skills. $200 per week will not be easy for a middle-income investor. After a year or more, if you can develop multiple sources of income or your salary increases, you can increase the speed of Bitcoin accumulation as well. Your extra effort in the process of earning can take you to a successful and good financial level and an attempt can be made to increase the holding by increasing Bitcoin accumulation.
However I think it is possible if you are persistent in your target and are mentally and financially prepared to do DCA regularly and buy lump sum of Bitcoin over this long period of 10 years. Various strategies for increasing personal income will definitely take you to a good financial level. Increasing Bitcoin holdings to balance cash flow, emergency fund provision.
My main point is that if guys have certain bitcoin quantity goals, then they likely need to be realistic about how much value that they have to put in over whatever period of time that they are expecting to be accumulating, and also consider how the bitcoin price might also be changing through that period, and sure it is more realistic for a guy who is now accumulating between $100 and $200 per week to consider that he might be able to get up to 1 bitcoin in 10 years as compared with a guy who might be putting $10 to $30 per week into bitcoin, and yeah, guys have their present income circumstance and their future income expectations that they can take into account when they are making their calculations and/or considering the extent to which their goals are based on real possibilities or fantasies.
By the way, guys who live in fantasies and set fantasy expectations are likely more harmful to themselves rather than anyone else, even though surely sometimes when they are communicating their fantasies to others, they may well end up misleading others into wrong thinking too, to the extent that the others might also be not ready, unwilling, and/or unable to make realistic calculations. Frequently I talk about using an Excel spreadsheet (or perhaps some other kind of spreadsheet that is available) in order to project out base case scenarios and then perhaps to project out more bullish and/or more bearish scenarios, so then if we are ongoingly projecting, then we may well incorporate a variety of factors.
Surely these kinds of future projections based on current knowledge can be done with regular pen and paper too, yet with Excel or some other spreadsheet there can be ways to tweak various variables within the projections in order to save work in terms of being able to see how a variety of scenarios might play out or that might be possible with perhaps the base case being the most realistic of scenarios but also good to consider other good or bad scenarios that might end up playing out based on future events coming to pass (or not). So for example there could be changes in the cost of living or changes in the appreciation of bitcoin or changes in some future income or changes in future expenses, and some of those items might be changed very easily and even having columns that might have percentage of change expectations in each of the categories that might have a higher or a lower rate at certain points in times based on some things that we might expect to happen..
so for example, for a younger person who is perhaps in college or some kind of a training school (program), he might project various levels of current income, yet possibilities to get promoted, and of course changes in family status could change expenses or even entering into businesses could have a lot of expenses but also projected income too and guys sometimes might get their projections wrong when there might be so many possibilities to try to account, yet the mere fact that there are a lot of possibilities does not mean it is not potentially fruitful to outline some projections as more or less likely with attempts to outline the more likely scenarios prior to incorporating the less likely scenarios.
Over time, we need to increase our investment budget, because as time goes by, the value of money decreases, and the value of our domestic fiat currency decreases. So we must also increase our discretionary income and increase the amount of Bitcoin we invest in weekly. If we are investing in Bitcoin for the long term, then we must increase our Bitcoin investment over time so that we can eventually buy one Bitcoin.
Yes, overtime fiat decreases in value due to inflation so we may not invest with the same amount of discretionary income every week or month after all necessary expenses has been met. It Isn't necessary we mustn't invest with a fix amount of discretionary income as your discretionary can be flexible because your bills last week or last month may be higher than other weeks or months. If what you have left after settling your bill for that week or month is $10, invest it and look for other additional jobs to increase the amount of your discretionary income.
One of the presumptions with bitcoin is that over a longer period of time, the debasement of the dollar (or whatever fiat) will go down more than the increase in value of bitcoin, so in a lot of senses, there aren't abilities to increase your buys into bitcoin at such a level that you are able to keep up with how much bitcoin is likely to cost in the future.
So for example there were guys who were buying between $10 and $100 per week in the earliest days of bitcoin (such as 2012 to 2015), and they were able to accumulate 10s or 100s and even 1000s of bitcoin with those quantities of investment.
Similar may well be true between 2016 and 2020, the guys who were buying $10s and $100s per week of bitcoin, were still able to accumulate several bitcoin, perhaps even greater than 20 to 40 bitcoin.
In each of those periods, the guy's income did not go up even close to as much as the bitcoin price went up, so even if they might have had been able to earn more than 10x their earlier income, they still were not able to accumulate as many bitcoin as they had been able to do in earlier times.
The trend is likely to continue, so there tend to be advantages in trying to accumulate more bitcoin in earlier years rather than expecting that the income going up in the future is going to be able to make up for a low level of bitcoin accumulation in earlier years.
Don't get me wrong.. Sometimes it may well be way more valuable to figure out ways to invest into yourself in terms of skills, learning, experiences and even networking so that you are more employable in the future rather than putting that time, money and energy into bitcoin, since income and future income can really be helpful in the abilities to both accumulate bitcoin but also to hold onto whatever bitcoin had been accumulated that includes not having to tap into bitcoin in order to pay for expenses, especially when guys are still young and in their income earning and income building years (or potential for such).
DCA helps you eliminate the pressure of having to invest large discretionary income into bitcoin at once by allowing you to buy with any amount from your discretionary income, over a long period of time, hence you must not buy 1BTC at once, but can invest even if it is $100 weekly consistently over a longer period of time and still stand a chance of meeting your target of same 1BTC, and the best part is that you don't feel the financial pressure you would've been through if you were to buy it all at once.
Like if you have a capital and you invest all that capital in Bitcoin in last October when Bitcoin price was at 120,000$ then your invested money will still be at loss but if you invest that capital through DCA strategy then you can have a reasonable average buying price.
You are thinking of short-term and it is not a good thought process for an investor, if such an investor had planned to hold for long, then they would be in a good position in the future if bitcoin continues doing well. if such an investor lump summed in October and followed up his investment journey with regular DCA and would not sell in a short-term, then he is still in a good practice since he is still adding to his stash and getting closer to his accumulation target.
The chances seem quite low that even a person investing $200 per week into bitcoin over the next 10 years would accumulate a whole BTC, $200 per week would be $10,400 over 1 year and $104k over 10 years.
Even though it is possible, it is quite unlikely that the average cost per BTC would be $104k or less over the next 10 years.. so it seems pie in the sky even with $200 per week to expect to accumulate 1 bitcoin in the next 10 years.
Doing DCA is not about getting any guarantee to get exact 1 BTC towards the whole their long term journey, but this is rather about building up steadily their accumulated Bitcoin for long term investment. If it happens that Bitcoin will cross again at $104k or more bigger than that many people might not reach to get 1 whole Bitcoin, still they can get or owned great fractions which total accumulated volume on long term efforts they made.
People should not only focus getting 1 BTC and if they didn't hit that they think its a bust, but rather they focus to accumulate depends on their capabilities then
let power of compounding works in their favor.Compounding has better chances of working to the favor of guys who had spent time accumulating bitcoin in earlier years, and so if they end up with a whimpy-sized bitcoin stash, the compounding might not play out so well for them, since they had not built up a stash in their earlier years, which is also a problem for traders and/or shitcoiners who get distracted into stacking the wrong things (if they are stacking cash or stacking shitcoins, then the compounding that ends up happening in bitcoin
(that is not guaranteed) will not end up working out too well for them.
I'm not comfortable with the term capital because if we look at the definition,it is not the same with discretional income. your capital is money you can't afford to lose and by investing it in bitcoin you are gambling with your bitcoin investment. However using your capital instead of your discretionary income could tempt you to sell your bitcoin investment if the market is not favorable or going as planned. it is not a good idea to invest with your capital because you might not be able to hold for the long-term instead using your discretionary income is preferable since it is money you can afford to lose.
If someone don't have discretionary income then what should be the strategy in that case? You wait for the time till you have discretionary income available at your disposal or invest with whatever you can afford to invest in Bitcoin.
In this case, its better not to wait for the availability of discretionary income rather start investing with whatever you can easily invest in Bitcoin. Meanwhile you must also try to generate discretionary income because that will help you in holding Bitcoin for longer duration. If we keep waiting for availability of sufficient money or discretionary income and not investing then we are only doing our loss because sooner you start better it is for you.
You don't seem to understand what is discretionary income.
You cannot invest without discretionary income, since if you don't have discretionary income, you need the money for expenses.. and if you invest with money you need for expenses, then you are gambling.. not investing.
Even if a guy has discretionary funds, he has three choices regarding how to use such discretionary funds. He can invest, save (backup funds) and/or discretionarily consume. It is likely important that he allocates some of his discretionary funds to each category, yet since the funds are discretionary, that means he can do whatever he likes with such money.. but if he chooses a path of using his discretionary funds that is too extreme and/or failing/refusing to account for the other two categories, then he might end up not being able to sustain such a practice.. so he has to figure out a balance that is comfortable within his own financial/psychological circumstances.
