Long-term DCA and drawdowns: how do you evaluate a strategy beyond returns?

[tygeade]

being a wonderful method of accumulating Bitcoin and suitable for all market conditions. Like you rightly noted, it is convenient for anyone to apply and it makes for growth in general since there is no panic whatsoever because the investor is not anxious to sell. I know one thing for sure which is that we are in the best time to buy and not to panic. When investors are done with buying gold and the surge is no longer there, Bitcoin will be the next, I'm sure of this. Those that will buy now will be able to see their portfolio in fat profits and very fast too.

There are millions of different opinions when it comes to DCA. Op just has one of those different opinions and after going through few other posts here, I see that not everyone is a fan of DCA. I don't know the exact reason, but what I can sense is they lack patience as they are not ready to wait for a couple of months or years before they can start booking profits. For me, DCA is one of the best strategies to eradicate risks and make long term profits because it makes me set a clear goal and also helps me in a strict budgeting. I would avoid pouring excessive funds while DCAing. This makes it one of my favourites.

Even in a situation where people are pouring their investments into gold and making withdrawals from their bitcoin portfolios, I think we can still set a clear goal and continue with our DCA strategies because eventually, they will start giving us profits after a couple of months. DCA is only for long term holders who have the ability to be patient. Rest, all will always have.

[terrific]

That's a good point but it really sets the meaning on who's doing it. Whether there's condition or a fixed date when doing DCA.
You can only determine it on your own if that's no longer DCA itself.
But in that point of view, what matters is still that the person is doing all the DCA and the main plan of having more Bitcoin or any crypto they prefer.

The intent (accumulation) can stay the same, but once conditions are added, the risk and edge no longer come from averaging, they come from regime selection. At that point it’s an execution framework, not a strategy in itself.

But I think that the goal remains the same and that's to have more in the end.
And that's a point that which I think is still going to be a good one depending on how you're looking at how you do it.
The risk remains the same and those conditions are met by doing so yet, the goal has never changed.

[AYOBA]

I agree with the long-term thesis — if Bitcoin continues to make new ATHs over multiple cycles, DCA will eventually work out in terms of price.

My point isn’t that DCA is unprofitable, but that profitability alone doesn’t fully describe the experience of holding through the process.

Since when the DCA method was introduced everyone prefers to use it when it comes to investing in the Bitcoin. And if to say that isn’t that unprofitable I don’t think that people will still using the DCA method, especially those that don’t have enough money to invest in the Bitcoin; but with the DCA Approach they where able to get what they want from Bitcoin investment.

So for me, the question isn’t “does DCA work if Bitcoin goes up long term?”, but rather:
how do you personally evaluate whether the strategy is still worth sticking with during those long, uncomfortable periods before the next ATH arrives?

Yes off course with the DCA method doesn’t matter how the Bitcoin price goes its works all the time and also fell comfortably, accept you don’t have choice to use it. Because if a person is able to accumulate the Bitcoin with the DCA strategy, it brings huge profits when in the future.

[Cgrexp]

I agree with the long-term thesis — if Bitcoin continues to make new ATHs over multiple cycles, DCA will eventually work out in terms of price.

My point isn’t that DCA is unprofitable, but that profitability alone doesn’t fully describe the experience of holding through the process.

Since when the DCA method was introduced everyone prefers to use it when it comes to investing in the Bitcoin. And if to say that isn’t that unprofitable I don’t think that people will still using the DCA method, especially those that don’t have enough money to invest in the Bitcoin; but with the DCA Approach they where able to get what they want from Bitcoin investment.

So for me, the question isn’t “does DCA work if Bitcoin goes up long term?”, but rather:
how do you personally evaluate whether the strategy is still worth sticking with during those long, uncomfortable periods before the next ATH arrives?

Yes off course with the DCA method doesn’t matter how the Bitcoin price goes its works all the time and also fell comfortably, accept you don’t have choice to use it. Because if a person is able to accumulate the Bitcoin with the DCA strategy, it brings huge profits when in the future.

DCA (Dollar-Cost Averaging) is a strategy for holding Bitcoin in the long term. It is difficult for anyone to predict how long it will take for the Bitcoin market to decline or recover. Therefore, investors need to protect their financial balance and cash flow management. Long-term investors are usually not overly concerned about temporary losses in holdings, and are able to continue investing patiently, even during long price corrections. It is important to set investments at a personal comfort level, so as not to be tempted to hold BTC and maintain the right strategy.

[Creeper0]

DCA is suitable for long-term investment, for short-term investors DCA may fail to provide good output, and may even face losses. Short-term investment is always risky, but in DCA, the risk is higher.

When doing DCA, it is not a matter of concern whether you buy during the decline or during the ATH, when you calculate after one or two cycles, you can also profit from the Bitcoin bought during the ATH. If you look at last year and look at today, you will understand the difference. Where last year the price of ATH was $70k-$80k, this year we are using that price as the dip. Today we are using $126k as the ATH, maybe this ATH will be considered as the dip in the upcoming cycle. The most important thing to discuss in DCA is to be consistent, be patient and have the ability to hold on.

[SeriouslyGiveaway]

DCA is suitable for long-term investment, for short-term investors DCA may fail to provide good output, and may even face losses. Short-term investment is always risky, but in DCA, the risk is higher.

Investors are actually going long term with their investments as a long term holding is like a mandate. People who buy bitcoin, want to have short term profit, and don't plan to hold bitcoin a long time, they're not actual investors but I'd prefer to consider them as speculators. They are not like investors at all, as they don't focus on value of Bitcoin, and their focus is on Bitcoin price, and they want to see price rises in short term for profit.

Whether Bitcoin has value or not, how its value will grow more in the future, and which fundamentals can help Bitcoin achieving these things are all not important with speculators while with actual investors, such fundamentals are super important for their investment decisions.