The whole fact about it all, is that everything we do concerns or requires a certain level of knowledge, it could aswell be that little which is rightly appropriate for a beginner, now going further the rest of knowledge goes with one's ability to remain consistent in the market. I think most especially the new investors are likely to make the right choices for themselves on how they understand even slightly on how the market operates, it could be on how much they choose to invest, when and what strategies to be implemented without having to blindly follow whatever they feel could be it, whereas we know that little mistake that could be made and it turns out to become a huge loss.
The only level of knowledge that is required here as an investor to start your Bitcoin journey is storage, security, risk and tolerance which in general are the process of starting an investment. When you eventually buy a little then you will understand that the rue knowledge comes when you have already get your investment kicking. Along the line you will understand what i mean. The good news is that there is a ton of information's out here for Bitcoin beginners. A lot of learning resources, articles and even here in this very forum can equip you with several knowledge from different enthusiast so that you can choose to make informed decisions from their opinions.
You seem to be implying the necessity of more knowledge than would be necessary to get started, and sure there are all kinds of folks suggesting these various kinds of higher level knowledge ideas while at the same time suggesting that not very much knowledge is necessary... which from my point of view contradicts and even may contribute to a lot of newbies believing that they need more knowledge than what they actually need, in order to get started.
Getting started only requires knowing the extent to which you have a disposable income or not and having at least some confidence that bitcoin is a good place to put some extra money (in case it catches on).. so as far as storage and security, surely there may well need to be some basics, yet if any newbie might be starting out by buying $10 to $100 on an exchange, some of those initial storage and security responsibilities can be delegated to exchanges, and there is no actual need to hold your own coins from the start - even though surely if you are holding coins on some exchange or more than one exchange, you are buying bitcoin price exposure rather than actual bitcoin, since we know that there is no real assurance that you are going to be able to get the coins until you withdraw them from the exchange, yet it seems to me that learning about self-custody does not need to take place in the very beginning of investing into bitcoin,
and one of the most important things for any newbie is to get started right away and surely the more you can learn along the way the better, since there are quite a few things that are good to know about bitcoin and to study into it, but the various aspects of bitcoin can be learned after getting started and the most important thing to know when getting started (like I already repeated multiple times) is whether you have a disposable income or not.. and if you have disposable income, then you can get started right away and if you don't have disposable income (or you are not sure), then you should figure out your disposable income situation before getting started investing into bitcoin, otherwise you would not be investing, but instead you would be gambling.. and yeah, sure lots of people love to gamble, yet I personally don't recommend gambling with something like bitcoin, but hey people can do what they like, including dumb shit.. which is likely part of the explanation why we still ONLY have around less than 1% of the world's population with any kind of stake in bitcoin.. so getting started still seems to be one of the most important aspects, and surely it seems that newbies should try not to gamble in terms of their getting started in bitcoin.
Sure the upwards and downwards movements of the price of Bitcoin is what keeps the Market balanced so an investor who is a beginner should not only think about buying with the believe that the price will keep skyrocketing because a time will come when the price will also experience some DIP in price so if it is someone that bought with the mindset of the price to continuously increase, they can become emotional when the price starts going down and they can even decide to sell out of panic which will be a very wrong approach for a beginner. A beginner should be able to understand that the journey of their hodling is a very long one so they need not to look at the price of Bitcoin at any intervals as what they should be concerned about is to keep accumulating through the DCA without dropping out at any point so far as their income is coming on a regular basis.
DCAing every week is a very good and quick way to making huge accumulation but any Bitcoin investor should be able to figure out when to best DCA without being affected in other areas of life so they can still DCA on a monthly basis depending on their inflow and the intervals they received their income, so for someone who receives income on weekly basis he can choose to DCA every week then for someone that receives monthly salary, can also DCA every month so there's no big deal about when to DCA.
It has often been discussed that waiting for a DIP to happen before buying Bitcoin is not a good practice because you can wait for a DIP and it doesn't come at that material time which might result to using up the money you wanted to use and buy at a DIP price on other needs that will arise.
It does not matter at what point we enter the market and start to DCA. Bitcoin has been expensive to start investing at all prices to procrastinators. It was expensive at $1, $10, $100, $30k, and $60 and it is close to $100k and it could be worth more than that shortly. Yet they still can't afford it.
Hahahahaha
Ironic!! right?
It is funny how bitcoin can be divided into 100 million sub-units, but still people seem to think that it is expensive, which truly helps to support that people do not really know what bitcoin is, and likely even experienced bitcoiner have little to no clue about what bitcoin is beyond it being NGU (number go up) technology. There may or may not be any need to know bitcoin beyond that it is NGU technology, which somewhat supports the point of getting started first and then study bitcoin as you go and perhaps expect that you might never really completely understand bitcoin, and it may well not even be necessarily to really understand bitcoin, but instead just focus on attempting to understand what is within your own potential grasps, which is your own financial and psychological management skills.
It does not matter at what point we enter the market and start to DCA. Bitcoin has been expensive to start investing at all prices to procrastinators. It was expensive at $1, $10, $100, $30k, and $60 and it is close to $100k and it could be worth more than that shortly. Yet they still can't afford it.
People who still think Bitcoin is expensive usually also tend to be afraid to buy at any price, so people like that will continue to delay and postpone buying Bitcoin because they always put forward their own reasons when asked by other people. Because for those who like to buy or really have the desire to buy Bitcoin whenever they have money that is not used, that person will not really care about the price as long as it can make him happy after buying Bitcoin. I also still like to use DCA when I want to buy Bitcoin, but sometimes I don't set a time for how many times I can buy Bitcoin each month because I sometimes like to buy when I have money that I don't use for other things.
That is a fairly decent point, wmaurik. Maybe you could be used as an example that even though you have been around the forum since early 2015, it still could be possible for longer term bitcoiners to still be in an accumulation phase of bitcoin, whether they might have made mistakes along the way or not, and surely there could be some folks who were somewhat "early" to bitcoin, but they might not have had any kind of disposable income that was sufficient in order to stack decent amounts of bitcoin in order to get them out of their accumulation phase and perhaps to get them into more of a maintenance stage in their bitcoin portfolio building journey.
Surely it is good to show members with a variety of experience levels in order that some members (including newbie BTC accumulators) can recognize and appreciate that it can take a decently long period of time to build their bitcoin portfolio up to a level in which they might graduate from some kind of strict BTC accumulation and then into some kinds of stages of BTC accumulation that might be a lot more flexible and less strict.
I frequently mention that I prefer weekly accumulation, especially for members in their earliest of BTC accumulation stages, yet many of us realize that there are some of us who may well have a lot of variability in our income and/or our expenses, and we may well end up structuring our bitcoin buys around such variability, so each of us likely have cashflow management systems that could cause us to invest into bitcoin in peculiar kinds of ways that might not be quite weekly and maybe we have to go as far spread out as monthly in terms of our determining that we have enough extra cashflow that we are able to invest into bitcoin for that particular month.. and maybe also sometimes our frequency (and consistency) in investing into bitcoin might also deal with when some of our income flows might come in (and we might not even know how much they are going to be exactly), and there could be some lack of knowledge of our exact expenses too, until certain bills come in, even if we might have systems in place in which we try to figure out our exact income and/or our expenses, but we still might well not want to pull the trigger on making certain bitcoin purchases until after the money comes to us or in terms of our actually receiving the bill (whether the bill is due right away or within a certain period of time that it must be paid).
The whole fact about it all, is that everything we do concerns or requires a certain level of knowledge, it could aswell be that little which is rightly appropriate for a beginner, now going further the rest of knowledge goes with one's ability to remain consistent in the market. I think most especially the new investors are likely to make the right choices for themselves on how they understand even slightly on how the market operates, it could be on how much they choose to invest, when and what strategies to be implemented without having to blindly follow whatever they feel could be it, whereas we know that little mistake that could be made and it turns out to become a huge loss.
The only level of knowledge that is required here as an investor to start your Bitcoin journey is storage, security, risk and tolerance which in general are the process of starting an investment. When you eventually buy a little then you will understand that the rue knowledge comes when you have already get your investment kicking. Along the line you will understand what i mean. The good news is that there is a ton of information's out here for Bitcoin beginners. A lot of learning resources, articles and even here in this very forum can equip you with several knowledge from different enthusiast so that you can choose to make informed decisions from their opinions.
You have forgotten to add the knowledge of how to buy from exchanges be it Dex or cex. This is also one of the basic knowledge that a new investor need to know because you will need to know how to deposit and convert your local currency into usdt in exchanges or how to buy from P2P in exchanges. Everything else you said above is valid, as I was reading through your post I just saw that you didn't cover this aspect. Buying bitcoin for the first time is a very delicate something and someone who is new really have to get the basic knowledge of how to navigate the exchanges to make his first buy. As it is not advisable to be buying through a third party, so a new investor should have the knowledge of how to use the exchanges.
I think that it is fair for you to highlight the basic needs of figuring out how coins are going to be sourced, and surely exchanges likely serve a fairly common source for beginner bitcoin investors, yet you should not be completely ruling out various possibilities that newbies might face in terms of options that might be available to them, including getting coins directly from someone they know or someone that they recently met... so yeah, surely getting coins directly from another person may well end up resulting in setting up wallets or even getting help with setting up wallets, yet there could be some folks that get started and get involved in bitcoin outside of going through exchanges, and by necessity they are put in a place to figure out the extent to which they might or might not trust the way that they are getting their first coins. I would not rule out various ways of getting coins, even though surely exchanges may be amongst the easiest of ways, but it could well be the case that exchanges might not be the best or easiest for all folks, and there is nothing wrong with promoting the ideas of direct exchanges with other bitcoiners when it might be a reasonable way to get started, even though there might be some needs for trust, whether it is trusting a relative or trusting a person who was referred or maybe going to some kind of bitcoin (or crypto) meetup and then trusting some meeting attendee that you just met.
I would not presume that people are not able to make judgements in regards to meeting people in person, even though there could be folks who are scammers or robbers, yet I doubt it is safe to presume that meeting actual people in the real world is going to result in our getting robbed or scammed since the fact of the matter remains that some of the real empowering of people comes through being able to associate with people in the real world rather than being dependent on internet relations, and surely bitcoin remains a kind of way that there are attempts to balance real world relations and digital forms of soundness and scarcity... So yeah there are powers in direct interactions, even if our first ways of getting and/or holding bitcoin may or may not end up involving such direct interactions.. We may end up using an exchange, but surely we do not have to use an exchange if person to person options are available to us.
If you are a new investor then surely this investment strategy will work for you. You just continue to invest in this strategy consistently and at some point you will realize for yourself how positive this strategy has been for you. When you look at your total investment after a long period of time, you will be amazed at how much you have invested even with small investments.
Not only new investors but also many experienced or old investors are now increasing their investments by adopting DCA regularly.
This part is correct.
Dollar cost averaging is a progressive and balanced investment strategy. One of our goals in investing in this way is to lower the average cost and even aim for better returns over the long term.
Two of your points are wrong.
DCA does not lower your average costs per BTC, and it does not even assure that you will get better returns over the long term.
DCA allows you to budget and to set your investment within your cashflow and your discretionary income, so that you may well be able to accumulate bitcoin more aggressively since you have a potentially systematized way of fitting your BTC investment within your discretionary income.
Sometimes people who do not follow DCA they may be able to make better profits and/or even accumulate more bitcoin, yet their level of success may have to do with their attempts (or even their luck) in timing the market, yet DCA may well allow a bitcoin accumulator to be more consistent in buying at all times, so the DCA'er may well end up accumulating more bitcoin, but surely it is not guaranteed that the DCAer will accumulate more bitcoin, and maybe there is a bit of a presumption when following a DCA method that many (if not most of us and maybe all of us) cannot really predict BTC prices very well, so in that regard, we are just so much more likely to be better off by just ongoingly buying bitcoin rather than trying to figure out if the BTC price is going to go up or down.. so in that sense DCA should be less stressful, even if sometimes we may well end up buying BTC at higher costs. .but since we don't really know about BTC price direction, we are still likely better off by just buying regularly rather than sometimes potentially waiting to buy and then the BTC price ends up going up and we end up spending too much time waiting (and attempting to strategize, and maybe even being overly greedy over amounts that are likely not even going to make much of a difference) rather than just buying regularly, ongoingly, persistently and consistently.
Those who have sufficient capacity may not invest in this method, but those who do not have sufficient capacity and even if they are willing to invest, if they invest using this method, it becomes easier for them to invest. Because by adopting this method you will be able to invest even in small scale.
These folks with low income or low capacity, they are still drawing from their disposable income, so yeah, you are correct overall in regards to NOT having any kind of need for BIG money in order to invest into bitcoin, and DCA could allow the setting up of a system that invests relatively low amounts on a regular basis.. but there still may be some needs in strategizing the low amounts, depending on various potential fees that might come with setting amounts overly low and then potentially getting eaten up by transaction fees of one sort or another (whether it is present transaction fees or the potential for some future transaction fees that might end up resulting from potentially poor UTXO management). It is not a no brainer in terms of any kind of system will work, and so sometimes the newbies buying lower amounts of bitcoin might still need to attempt to structure their bitcoin buys so that they do not end up overly paying transaction fees whether in the present or in the future based on the size of their UTXOs and how they might end up choosing to transact and/or store their coins.
Buy Bitcoins with the same amount of money every week or month using DCA regardless of whether the price of Bitcoin goes up or down. I read in the pages of the book that small grains of sand form continents. Similarly, if you invest in the dollar cost averaging method, your small investment will eventually turn into a large one.
Sure this is a fair point, as long as you have sufficiently and/or adequately accounted for fees and potential future fees.
In other words, assuming you want to invest $10k into bitcoin in the next six months and you have the money now, as long as you have chosen to use the DCA strategy, it means you have to invest gradually while keeping the other parts till the time for the next buy. This is a kind of waiting.
You have provided an example in which a person already has $10k, which truly is not the case for most folks, and they will tend to have an income, and maybe a person has $10k right now or maybe he has $7,500 right now and an income that would allow another $100 per week over the next 26 weeks (aka 6 months - aka $2,600), so he has a total of $10,100 over the next 6 months and he could invest up to $7,500 right now or he could divide that $7,500 into the three categories of DCA, lump sum and buying on dip, so if he chooses either DCA or buying the dip with some or all of that money, then those surely would be waiting strategies in comparison to a choice to put some or all of the $7,500 into bitcoin right away - so yeah, he has the luxury of having the option, yet most people will end up needing to figure out how much they are able to invest into bitcoin as their cash and expenses come in, and surely they can attempt to anticipate that income and expenses so they will have a ballpark idea regarding how much of that ongoing income and expenses (as it comes in) they are going to be able to use towards bitcoin investing, so in that regard, if they are waiting for the income to come in then they are not really engaging in a waiting strategy - even though surely they could choose to front load their investment into bitcoin and to take out some kinds of loan based on their anticipated future cashflow to invest right now instead of waiting for the cash to come in.
Exchange is the first place a new investor needs to store his bitcoin in the beginning because it is from exchange that he will buy his bitcoin from and because he is new in bitcoin and have the money to start buying immediately, he will leave his coins in an exchange and gradually when his bitcoin size is increasing due to regular DCA purchases, he can learn on which wallet that he can use to keep his bitcoin safe. You should also know that since he is a new investor and getting started immediately is the best no matter how little the amount is, he needs to pile up his bitcoin in an exchange so that it can get up to $500 and above before he can send it to his self custody wallet that is best for him.
If not for high transactions fees I see no reason why you should buy and accumulate Bitcoin in an exchange because it can become vulnerable to hacks, we should know that exchanges is not the best place to store our Bitcoin no matter how little it is because the security of our Bitcoin should be taken at utmost priority. I know that $500 may not appear too big for you but to some people it is especially when they think of the amount in Fiat they used to buy such quantity of Bitcoin so there is no amount that is too small to lose but as for me, so far as I have long term hodling targets, i will prefer to move my Bitcoins to self custodial wallets immediately after making the purchase. Exchanges are risky to keep one's bitcoin and leave till you have accumulated enough, don't forget that there were previous cases of exchanges crashing and a lot of people that had assets in those exchanges lost everything so we ought to give our assets maximum protection which is to seek for self custody wallets even though the asset may be very little, it's better to lose part of your assets as transaction fees than lose everything to exchange platforms.
Hopefully, you and others engaged in the practice of withdrawing a bunch of small transaction sizes are not going to get fucked from future transaction fees because you have ended up engaging in a practice of creating a bunch of small UTXOs that could come to bite you in the ass if you have a bunch of them. Consider a guy who might even buy $10 to $50 daily, and if he ends up accumulating $3k to $5k over a year, then maybe he has around 300 transactions with a bunch of small UTXOs - as compared to the guy who might withdraw after accumulating $300 to $500 in value (or maybe he considers some kind of satoshi size of 300k to 1 million), so maybe the guy with better attempts at UTXO management is going to end up with 10 to 20 transactions (UTXOs) as compared with the guy with around 300 UTXOs.
Each of us has to figure out these kinds of balances, and we need to be careful to NOT end up fucking ourselves because we overly focus on something that ends up not working out so great for our situation - and yeah, maybe fees are not going to go back up to some of their outrageously high levels, yet I would not count on low onchain fees, and so there are likely going to be some ways that each of us has to figure out how we are going to balance exchange (or third party custody) risk with the transactability of the UTXOs that we create or that we might end up receiving from others.
