Bitcoin investment with lump sum or regular small amount

Izarok

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Quote from: lordquanta on October 04, 2017, 04:12:33 AM

Hello,

While investing in stock, commodity, bitcoin, alt-coins, forex etc one could go with
1: Lump sum purchase of big amount. Purchase bitcoin in quantity when price is comparatively low that previous weeks. Purchase date, timing could be adjusted as per individual suiting.

2: Other way is to follow the SIP that systematic investment plan. This SIP will purchase bitcoin worth $100 or whatever predefined amount. So monthly purchase of fifty dollars or convenient one worth bitcoins will be purchased. Irrespective of price of bitcoin at that time.

What do you think which one works best in long term? and which one works in short term? Which will earn better profit?

I'll go with option 2 for long term. Option 1 is a bit tricky, with bitcoin you can't pretty much pinpoint or target a certain timing in pricing. Also, take note of some potential dips that can be a great source of profit. Buy at a low price, hodl for a while and sell.

speedy963

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Considering those options above, choosing between huge quantities and small amounts, i think i would go to smaller amounts when in the case that i am still a newbie in trading or investing, its because you cannot determine whether its the lowest, middle or at peak price, then you should research further for more informations.

KourtneyK

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I think it is much better to purchase Bitcoin when its prices are low and if it goes down more then you buy them again. But at the end of the day, the decision still boils down to you if whichever you think is more profitable on your side.

criz2fer

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Quote from: lordquanta on October 04, 2017, 04:12:33 AM

Hello,

While investing in stock, commodity, bitcoin, alt-coins, forex etc one could go with
1: Lump sum purchase of big amount. Purchase bitcoin in quantity when price is comparatively low that previous weeks. Purchase date, timing could be adjusted as per individual suiting.

2: Other way is to follow the SIP that systematic investment plan. This SIP will purchase bitcoin worth $100 or whatever predefined amount. So monthly purchase of fifty dollars or convenient one worth bitcoins will be purchased. Irrespective of price of bitcoin at that time.

What do you think which one works best in long term? and which one works in short term? Which will earn better profit?

I think the scenario 2 because its just like averaging your investment in any price that could come but I still suggest to still buy at low. Since bitcoin is volatile, we really cant predict what will happen if the price will be bullish. Grab every small dump because the profit is there.

nl247

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This decision balls down to you. Sure! at this stage you wont loose anything whether you are buying lump sum or regular small amounts. However, bitcoin is volatile and we cannot always predict its movement, so both can still end up either falling in your favour or not falling in your favour. You can decide to buy lump sum and the value comes down a bit tomorrow wishing you had keep some funds, or you can just buy small hoping the value will come down only to discover the bullish signal will never stop and the chances of buying at that value you could have bought wont be possible again. Although, studying the market sometimes, can help your decisions.

Palmerson

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Quote from: o_e_l_e_o on October 08, 2017, 09:50:17 AM

The issue with a lump sum is predicting the dips. If it dips to 3k and you buy, what if it then dips to 2.5 or even 2k?

In the future this situation may lead you to bankruptcy. But now you nothing risk. If you get into a failure it will only freeze for a while your assets. Then the price will go up again and you will get income. The beauty of bitcoin lies in the fact that he now forgives mistakes. At the end of each year, its price is steadily growing.

talkbitcoin

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i think it comes down on what you plan on doing.
for example if you want to actively trade, the second strategy will not work. you need to buy with "lump sum" in a big dip and sell after the recovery was done.

but i am guessing you are mostly talking about long term investment in bitcoin rather than trading it. in which case both are good options in my experience.
it depends mostly on the situation. for example recently there was a big dip, in this case you should have bought a large amount at once near the bottom.
but now that price has already recovered and rising you should buy slowly, $50 per month/week,... and continue investing like this.

Ewinsane

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Quote from: o_e_l_e_o on October 08, 2017, 09:50:17 AM

The issue with a lump sum is predicting the dips. If it dips to 3k and you buy, what if it then dips to 2.5 or even 2k?

Exactly what will you do if the dips are going deeper ?

There will be much loss in this scenario. Actually business is all about measuring profits with better calculations of risk. Wherever you find little risk, you will be going to prefer it over the greater. Whole lump-sum never agreeable to invest even it is bitcoin. Just start with small amount and then keep increasing it.

o_e_l_e_o

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The issue with a lump sum is predicting the dips. If it dips to 3k and you buy, what if it then dips to 2.5 or even 2k?

lordquanta

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Quote from: Zagitta on October 06, 2017, 04:10:39 AM

Of course a lump sum is the better option if you can somehow afford it. The more Bitcoin you have, the better. Tongue

True, if money is available for investment then lump sum is profitable. Provided that person has some study of the market movement. That is if market is heading towards somewhat low phase. Like recently when market touched the 33k dollars. That was great opportunity to buy in the lump sum. Now market is ~43k dollars. This is risky if goal is short-sighted. Long term goals are what makes profit more lucrative. This with lump sum investment one must be patient to see the profit in foreseeable future. Compared to the small investment with regular interval this duration of seeing profit is even more. However there is lower risk.

Zagitta

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Of course a lump sum is the better option if you can somehow afford it. The more Bitcoin you have, the better. Tongue

dothebeats

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As someone who doesn't have a big amount of cash always lying around, I'd choose the second method as it also helps average your spending and could potentially prevent a big loss (and a heart attack) if everything doesn't go well as planned. The first method works for those who have deep pockets but not everyone can afford it, though regardless of both methods thing is you need to buy low and sell high in order to make a profit.

TheUltraElite

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So anyway, I applied as a merit source :)

Quote from: lordquanta on October 06, 2017, 02:04:44 AM

Quote from: tobi4255 on October 05, 2017, 09:18:51 AM

Quote from: TheUltraElite on October 05, 2017, 05:00:48 AM

In any case whenever prices fall below 3500USD/BTC I buy small volumes of bitcoin and hold it. Because in my experience whenever there is a fall a rise will follow.

^This.

Imagine if you had been buying BTC on "dips" all the way from 100-200 USD prices (its where i first came to know about BTC) because at that range, reaching 1000 USD was almost unimaginable. It was just a tale of the past, at least to me. Then it happened, and I did not have nearly as much BTC as i would like to...

I would definitely recommend, if investing for long-term, to check price a couple of times daily and buy lesser chunks when it pulls back.

My personal prediction is that, at some point in time, BTC will break 8000 USD level.

I doubt it will be within 2017 though..

Everybody wishes and thinks that bitcoin should be bought when price is low or drops substantially. Problem is with the two things : 1. fear 2.greed
* Many have fear of losing profit margin if dropping bitcoin trend starts showing upward movement. And this triggers the greed of earning more and more profit.
* In a way purchasing bitcoin at drop looks appropriate but who knows when market would show upward direction when downward movement.
* That is why it is better and safer way to keep on buying small amount at constant interval.

If situation like JP Morgan arises where market suddenly goes in tailspin mode then that is clear indication of buying in chunk. However these kind of instances are few to work with.

Trading should not be done with a weak heart - nothing personal and no offense but I believe every trader to be successful should get rid of these emotions : fear, greed and jealousy.

If you fear then do not trade at all because the fear will make you panic and you will be the same as all other panic sellers. Greed and jealously will only make yo stubborn unable to accept correct decisions.

I believe that bitcoin price will keep on increasing and I am ready to hold it for at least a decade if not more - I will pass it on to my successors if necessary. Because I believe in the bitcoin economy and that it will take over the fiat economy. If you differ then and would like to doubt if prices will go down and that you will lose money - you are thinking in self defense and I suggest you not to trade at all because this mentality will stop you from making any serious money.

lordquanta

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Quote from: tobi4255 on October 05, 2017, 09:18:51 AM

Quote from: TheUltraElite on October 05, 2017, 05:00:48 AM

In any case whenever prices fall below 3500USD/BTC I buy small volumes of bitcoin and hold it. Because in my experience whenever there is a fall a rise will follow.

^This.

Imagine if you had been buying BTC on "dips" all the way from 100-200 USD prices (its where i first came to know about BTC) because at that range, reaching 1000 USD was almost unimaginable. It was just a tale of the past, at least to me. Then it happened, and I did not have nearly as much BTC as i would like to...

I would definitely recommend, if investing for long-term, to check price a couple of times daily and buy lesser chunks when it pulls back.

My personal prediction is that, at some point in time, BTC will break 8000 USD level.

I doubt it will be within 2017 though..

Everybody wishes and thinks that bitcoin should be bought when price is low or drops substantially. Problem is with the two things : 1. fear 2.greed
* Many have fear of losing profit margin if dropping bitcoin trend starts showing upward movement. And this triggers the greed of earning more and more profit.
* In a way purchasing bitcoin at drop looks appropriate but who knows when market would show upward direction when downward movement.
* That is why it is better and safer way to keep on buying small amount at constant interval.

If situation like JP Morgan arises where market suddenly goes in tailspin mode then that is clear indication of buying in chunk. However these kind of instances are few to work with.

tobi4255

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Quote from: TheUltraElite on October 05, 2017, 05:00:48 AM

In any case whenever prices fall below 3500USD/BTC I buy small volumes of bitcoin and hold it. Because in my experience whenever there is a fall a rise will follow.

^This.

Imagine if you had been buying BTC on "dips" all the way from 100-200 USD prices (its where i first came to know about BTC) because at that range, reaching 1000 USD was almost unimaginable. It was just a tale of the past, at least to me. Then it happened, and I did not have nearly as much BTC as i would like to...

I would definitely recommend, if investing for long-term, to check price a couple of times daily and buy lesser chunks when it pulls back.

My personal prediction is that, at some point in time, BTC will break 8000 USD level.

I doubt it will be within 2017 though..

hase0278

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Quote from: MoonIsBlue on October 05, 2017, 06:29:39 AM

I'd say buying lump amounts on dips is better for short term trading. I'd also say its more effective for long term holding.

I think that bulk buys vs dollar/averaging each month is entirely dependent on your own financial situation.
If you have a low income its better to dollar/average each month.
If you can spare the money then its best to buy on a dip regardless of longterm/small term holding.

It is really typically better to buy huge amounts on dips, but it is better to do so when there is a big fall in price. When that suddenly happens, it is the best strategy to use if one plans for long term holding. If for short term, you are right that buying at dips is good it gives nice profits anyway in the end after several days or months of holding since bitcoin price is very volatile. The only bad thing to do when buying though is buying at highs since it is relatively hard to recover money when one does that and sometimes takes years.

krishnapramod

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Quote from: lordquanta on October 04, 2017, 04:12:33 AM

Hello,

While investing in stock, commodity, bitcoin, alt-coins, forex etc one could go with
1: Lump sum purchase of big amount. Purchase bitcoin in quantity when price is comparatively low that previous weeks. Purchase date, timing could be adjusted as per individual suiting.

2: Other way is to follow the SIP that systematic investment plan. This SIP will purchase bitcoin worth $100 or whatever predefined amount. So monthly purchase of fifty dollars or convenient one worth bitcoins will be purchased. Irrespective of price of bitcoin at that time.

What do you think which one works best in long term? and which one works in short term? Which will earn better profit?

One-time investment vs investing in small amounts over a period of time. Both the investment approaches are good, but considering Bitcoins volatility, the systematic investment plan approach is better since it mitigates the risk of market volatility, spread out at different points, averages out.

Lumsum investment is good for long-term, but comes with high risk, timing the market, hodl, one point, price may go above that or below that point.

IMO investing small amounts of Bitcoin over a period of time is a better strategy than one-time investment.

MoonIsBlue

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I'd say buying lump amounts on dips is better for short term trading. I'd also say its more effective for long term holding.

I think that bulk buys vs dollar/averaging each month is entirely dependent on your own financial situation.
If you have a low income its better to dollar/average each month.
If you can spare the money then its best to buy on a dip regardless of longterm/small term holding.

TheUltraElite

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So anyway, I applied as a merit source :)

In my opinion I prefer to buy lump amounts when prices are low and hold that for long term. If you are willing to do short term trading then I suggest small buys. Both options are good and both are profitable if done properly but you must keep an eye on the market closely if you are doing short term trading. Because I dont know much about SIP I am not commenting on that. What I am saying is from my own personal experience.

In any case whenever prices fall below 3500USD/BTC I buy small volumes of bitcoin and hold it. Because in my experience whenever there is a fall a rise will follow.

DaMut

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based on your option we should can see it clearly which one is the best in the long run and short run.
1st option is the best way for a short run,
reason : Purchase bitcoin in quantity,that mean you're buying it as much as you can and the price is lower than before.and when the price is higher than before you can sell it right away.
2nd option is the best way for a long run,
reason : So monthly purchase of fifty dollars or convenient one worth bitcoins will be purchased,long run is a well prepared strategy.

Short term is determined by the quantity to get profit from every trade,and long trade is based on strategy.
financial back up and saving.

Almat

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If there were a definitive one-size-fits-all method for investments, then everyone would be all over it. There are way too many moving parts, that the best you can do is an educated guess. Personally I would choose to invest systematically, as it eliminates a lot of variables on your side. It ignores bias and you typically only put out money you can afford.

lordquanta

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It is better to purchase small amount of bitcoin regularly rather than purchasing than whole chunk on coins at once. With the regular interval investment you understand the market trends better and change your strategy accordingly. Like if there is sudden downward movement in the market then you could wait for some time and try to purchase more coins at the low rate. And when market is on the rise then try to purchase more coins as early as possible.
Interesting in long run these little modification or fine tuning may prove futile if difference is less. Again if the difference is considerable then these little adjustments could be the difference.

lordquanta

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Hello,

While investing in stock, commodity, bitcoin, alt-coins, forex etc one could go with
1: Lump sum purchase of big amount. Purchase bitcoin in quantity when price is comparatively low that previous weeks. Purchase date, timing could be adjusted as per individual suiting.

2: Other way is to follow the SIP that systematic investment plan. This SIP will purchase bitcoin worth $100 or whatever predefined amount. So monthly purchase of fifty dollars or convenient one worth bitcoins will be purchased. Irrespective of price of bitcoin at that time.

What do you think which one works best in long term? and which one works in short term? Which will earn better profit?

Topic: Bitcoin investment with lump sum or regular small amount (Read 545 times)