Although this type of topic has been discussed before, I would like to share some of my experience with many newbies who are looking to buy and hold Bitcoin due to the low price of Bitcoin at present. Currently, the price of Bitcoin has dropped a lot. Since it is going through a bear market, many people are asking to buy Bitcoin and hold it in various ways. If you think logically and look at past data, you will see that if you invest a large amount in Bitcoin in a bear market, there is a high possibility of profit. However, I am highlighting some points on what is actually suitable for you.
During Bear Market
Many people compare DCA vs Lump Sum only from the perspective of which one will give more profit. The real question is which one will save you from making the wrong decision at the wrong time, and which one can be run sustainably for years. most people in Bitcoin lose money not because of the price has dropped. They enter incorrectly. thats why they do force sell to economic pressure and fear. Why is DCA so useful? Because it doesn't ask for predictions. There's no need to catch the bottom, no need to find the perfect entry right now. You just buy regularly from your discretionary budget. $50 a week, $80 a month, or whatever is realistic for you. When the price drops, more bitcoin you can accumulate for the same money. When the price rises, the previous purchases work. This process stabilizes the average cost of buying, and reduces mental stress . Because you are not changing your decision by watching the market every day. DCA does not teach you to buy at the best price. DCA teaches you not to make mistakes and this is the biggest skill to survive in Bitcoin.
Lump Sum is not entirely wrong. But it is a different risk . Lump sum means you take all the timing risk in one day. If you are lucky, you will see quick results. But if you buy near the top, then it can be difficult to keep your mind stable after seeing a 30–50% drawdown. This is where the mental and financial capacity are different. Many people say they will tolerate it, but if the price drops, especially if there is a life emergency, they end up selling. So the most important question before doing a Lump Sum . Is it really possible to keep this money untouched for many years? If not, then Lump Sum will make you a stressed person instead of an investor.
I see DCA as a particularly positive thing because it takes you out of the trading mentality. Another big reason DCA can be used with all kinds of lifestyles. Most of us live on the cash flow of a salary or business. That means money comes in particular stages. So Bitcoin accumulation is also natural to be weekly or monthly . DCA turns this normality into a plan. You first spend on basic expenses, then buy regularly from the part that is really discretionary and create a backup. This setup helps the most to avoid forced sales. Because when an emergency comes, you will use the cash reserve, Bitcoin will not break. You will not be afraid if the market goes down, because your budget is okay. So the question arises, should you never do a lump sum? A lump sum can be done. But it is usually more reasonable for those who have a one-time extra money, who are relatively wealthy, financially stable with reserves. And who can really withstand drawdowns. Even for them, a combination of lump sum and DCA can be a practical method. Put one part in now, the rest in DCA over time. This way you are not completely out of the market, and you do not bear the timing risk all in one day.
My position is clear. The biggest advantage of Bitcoin is time. And it takes consistency to use time. DCA holds these two things together. Where lump sums often push people to make wrong decisions in the hope of quick profits. Because in Bitcoin, big gains are preceded by big drawdowns, and those who survive the drawdowns are the ones who ultimately succeed.
