Topic: Buy the DIP, and HODL! - page 22. (Read 138580 times)

Of course, lump sum doesn't really mean a big amount of money its just buying all in one strategy, which a poor bitcoin investor can also do if he has extra cash from work or as bonus since he doesn't have any plan for the money. It's just that it is good that brand new investor keep his bitcoin investment ongoing overtime so that he can be building and growing his portfolio bit by bit and that's where the DCA strategy comes to play because it's flexible enough for anyone to accumulate easily and it disciplines the investor on how to manage his finances properly.

No method is not helpful or bad but it depends on the strength of your cash inflow, the level of your bitcoin portfolio and how long you have being accumulating bitcoin. However, using all three strategies is good but you need to know prepare for it and know the right to use them to avoid miscalculation that will lead to reducing the size of your bitcoin portfolio. Because that's the most important thing when building your bitcoin portfolio only to keep adding without reduction

First and foremost,  there is no method of buying bitcoin that is reserved for the poor or the rich, anyone can use any method to buy. It is very wrong when we make it look as if the DCA method is for the poor while lump sum buy is for the rich, such notion is wrong and misleading. The method of buying is just an individual thing which depends on what the individual is comfortable with and if we put forward this idea of DCA for the poor and lump sum for the rich, there could be people who have small discretionary income and who would prefer just putting them into bitcoin but might be discouraged thinking the money is too small. This will cost them the opportunity of getting started since they don't know that even lump sum can be made with small amount of money.

DCA method is no doubt a great method of going about Bitcoin investment but other methods can still be used to achieve similar results as the DCA method and even a combined method of DCA and lump sum can even be better depending on the market condition.

There is no much to puzzle on this, right from time to time the direction to accumulate Bitcoin has always accord on this buying gradually if you can't afford lumps sum that most people felt it's those that have money that invest in Bitcoin, the DCA strategy which has given room to all kind of investor  even the so called lumps some required investor to to keep accumulating while holding for long time in order to get a good profit at the appreciate time because this regular buying or accumulating for me can covers some lapse most the one investor buys when there is ATH because the investor keeps buying regularly he can also buy at a period of ATL when the dip is experience and both situation can be merge to attain the required profit when the actual holding period is put in place.

Yes, Bitcoin volatility rate is high with no exception to how the price might increase, still we should have in mind that same way the price have the possibility of increasing while holding funds to lump sum, the price of Bitcoin might also decide to fall below giving the investor an opportunity to invest and hold more portions of Bitcoin using that same amount. Delays with funds can positively or negative affect the impact of our portfolio, purchasing at a high price or even lower.
1 Bitcoin = $100K (At when due)

0.83 Bitcoin = $100K  (When the price of Bitcoin increase)

1.2 Bitcoin = $100K (By time the price of Bitcoin reduces)

For those who do not want to make use of the DCA approach and love to implement the lump sum method should consider proper timing, not procrastination or delay understanding the market and knowing when to buy with the consciousness of holding for a long term.

These two companies mentioned by you have huge amount of money but they are adopting DCA in investment. Maybe this company has a lot of money with which they buy a lot of bitcoins at once but they are constantly buying Bitcoin. They sometimes buy more bitcoins and sometimes they buy less bitcoins. MicroStrategy recently announced that they will raise another two billion in capital to purchase Bitcoin. They are currently buying small amounts of bitcoins but their goal is to buy bitcoins regularly.

Every investor should buy Bitcoin regularly and hold their investment for a long time, just as these companies regularly buy Bitcoin. If someone has the money to buy more bitcoins then he will buy more bitcoins and if someone has the money to buy less bitcoins then he will buy less bitcoins. Still he should buy bitcoins regularly.

Surely I agree with you that if a person has money to lump sum once at go, he should invest it fast as possible without hesitation but that does not mean that Bitcoin will outgrown the impossibility of buying according to your Budget. Of course that is a misinformation, Bitcoin nature permit any one to buy according to their budget. For example if 1 Bitcoin today is $100k and you have $100k to buy 1 Bitcoin but due to procrastinatination you somehow waited for Bitcoin to increase to $120k surely you will not be able to buy 1 Bitcoin $100k, you will be able to afford 0.833BTC with $100k and not 1 or 0.99BTC. So surely Bitcoin is affordable with any amount you have but not less than $5.

Most of what you wrote down here are very confusing and difficult to understand, but I just want to talk about this your last statement here, you aren't saying it right, but I know what you are trying to say, anyone that fails to buy Bitcoin when necessary is either procrastinating or they don't have the resources to do so, not being lazy as you claimed.
And the most important thing you really need to understand about this whole Bitcoin investment of a thing is that, in all you do, having an emergency funds and a discretionary income is very much key, because that's what will prevent you from tempering with your holdings in the future.
Though your mean of accumulation will determine how huge your stash of Bitcoin will be but holding and not tempering with it is the most important thing after buying, but the survival of your Bitcoin investment depends on you having an emergency funds and a decretionary income in place .

Yes, the funds that need to be kept ready when running a DCA should not be confused, An emergency fund is primarily set aside to deal with unexpected financial problems, you cannot use this fund to buy Bitcoin DIP. If an investor really wants to buy Bitcoin DIP, he can keep a reserve fund in addition to the emergency fund, with which he can buy DIP, but the emergency fund should be used only for unexpected things, such as car or house repairs, or emergency health expenses, or to deal with any family problems.

And it should be remembered that DCA should be invested using excess money, not from money that is needed for daily expenses or emergency funds. And to achieve success from DCA, an investor should continue to invest in DCA continuously for 8 to 10 years, because Bitcoin is a long-term potential currency, short-term profits can never be expected from Bitcoin. This is why you should run a DCA with your extra income in a disciplined manner, and use your emergency fund for unexpected expenses, and for buying DIPs keep a reserve fund ready.

Which to a certain degree is good for bitcoin because as far as I understand, Blackrock is obliged to have 100% of their sold derivatives covered, which means there is no thin air gap in what they sell to their clients and what they have to have under their control. At some point I thought that these companies have some scope, which allows them to only hold like 50% or something and that could have led to systemic problems and potential fire sales. Then again Blackrock is unlikely to get into trouble if bitcoin doesn't perform well even if these gaps/leverage were allowed. But as I said, I think it isn't.

MSTR is an interesting case that is difficult to assess if you don't take the time to have a closer look at their balance sheet and how they have structured all the financials. It is complicated because they have set up a huge toolbox, but so far Saylor has been using it in a way that makes sure the balance is kept. While I can't verify this at first glance, here is a quote from someone that I think could be about right:


The various tools with varying durations, convertibles etc. gives enough runway to survive for a long time even if bitcoin goes through prolonged bad times. Now there is still some concern as to why MSTR is trading at market cap 3x its BTC holdings. But I think this has mostly to do with the vision that Saylor presented (first global bitcoin bank) and the fact that the current holdings give MSTR a huge competitive advantage for future endeavors. In order to a bitcoin bank, a certain amount of BTC is necessary and if any other company would like to compete with MSTR, they would first have to acquire a lot of BTC, which MSTR has already done. Competitors would make MSTR stronger while they try to become more competitive themselves as there are only so many bitcoin.

Here it is well explained how MSTR trading at a premium in relation to its BTC holdings plays out.

"Think about it like this: if MicroStrategy holds ~$30 billion in bitcoin and the company’s worth ~$100 billion, by issuing $1 billion in convertible debt (or equity) to buy bitcoin, its bitcoin holdings increase by ~3% while equity is only diluted by ~1%. Buying pressure sends the price of bitcoin higher, MicroStrategy’s stock continues to increase as bitcoin grows more valuable, and the cycle repeats."

You are getting the concept of the DCA strategy and emergency fund wrong. An emergency fund is not a strategy for accumulating bitcoin; it is the money you set aside when you are investing in bitcoin that will help you to solve your unforeseen problems anytime they arise. For instance, if you are investing in bitcoin and suddenly your car broke down, you will use your emergency fund to fix or repair your car since it is an unexpected problem and it's part of your daily expenses. You are wrong. If you are using the DCA strategy to accumulate bitcoin, you can only fail in your investment if you use all your money to invest in bitcoin or if you use the money that is meant to solve your daily expenses and invest in bitcoin, and your daily expenses arise, you have no choice but to depend on your bitcoin investment to survive.

You are misinterpreting emergency fund. Any type of fund is not an investment strategy. You can call emergency fund or other funds together as backup fund. Backup fund is the protection of long-term investments. Just as every asset needs protection, investment needs protection. Emergency fund is a strategy for protecting investments. It is essential to have emergency fund or necessary backup funds ready to succeed in long-term investment.

Even in the use of emergency fund, you are ignorant or wrongly defined. Emergency fund is only for emergency moments. Emergency moments are like: 1) Unexpected accident of you or any member of your family or accident of someone for whom you have responsibility or duty. 2) You or someone in your charge getting sick (arrange medical treatment). Especially these two situations are considered as emergency moments. You can consider some other necessary moments along with emergencies like: getting fired from your job suddenly, helping your close friend in distress, buying something that you need urgently. However, you can consider these along with the reserve fund. If you are not able to meet these needs with the reserve fund, then you can consider meeting these needs with the emergency fund. You should keep various backup funds ready as per the need and use the funds according to the plan. Using the emergency fund only to meet the needs will not be the right thing to do.

I used that example in other to make it more understandable, it may not be a realistic example for you but there are people accumulating with even more than that amount I mentioned and yeah normal people may not have such amount to buy at once and I don't remember mentioning normal people in my example we all know that a normal person can't invest with such amount because he or she won't have it, I'm talking about rich people who has such amount of money and wants to use it to invest in Bitcoin.

Yeah you are right some people may find it hard to cash out from there other investment to invest in Bitcoin and the reason may be because that invest is there source of income so using DCA strategy will be more better for them, because if you cash out from your other investment and then use it to buy Bitcoin at once knowing fully well that's your source of income, you will one day deep has into your Bitcoin investment to settle bills, the money you should use for a lump sum is money that won't affect your financial status if been removed, it may be easier to cash out from your investment when you have many investment and may decide to do so with 1.

I never realized that I over pointed on lump sum strategy, however you are very correct sir JJG when you said DCA and lump sum might not even be very different from one another, one is buying bit by bit and the other is buying at once there two are now holding is really not very different but there's a little different.

Blackrock buys bitcoin on behalf of clients who had purchased Spot BTC ETFs. 

Sure, blackrock owns the keys, but they have legal obligations to clients.

MSTR structures its financial products in ways that they BTC are not encumbered, even though they tend to promise (repeatedly) that they are never selling.. ]

There are similarities yet differences, and surely if we are talking about individual strategies then we have to consider cashflows and perhaps other investments that they might have and I suppose your mentioning of companies is because you are wanting to show examples in which lump sum might be used rather than DCA, which is fair enough, and surely anyone who has lump sum available may well choose to lump sum rather than DCA, yet even if they have a lump sum they still might spread their entry over a few weeks rather than buying everything at once, even if they might get into their target allocation position in a relatively front-loading kind of a manner.

Buying Bitcoin all at once in large or large amounts is also not a problem for investors or companies who have a lot of money and I have also seen this in several investment companies that are very brave to do this, for example, like Blackrock and Microstrategy today where they very often buy Bitcoin in large quantities and the DCA they do is also in larger amounts rather than in smaller accumulations like investors who only have limited capital. However, what you need to understand here is that a strategy like DCA is not bad at all even though the amount of Bitcoin purchases can still vary greatly for each person because it is also always adjusted to our respective abilities.

Hope you know that that Emergency fund(s) is not a method of buying bitcoin? Rather it is just a fund you keep aside to help you successfully hold your bitcoin for the desirable number of years.

The emergency funds is not meant for meeting your needs as an investor. The emergency funds are strictly there for any emergency purposes (unforeseen circumstances that may arise in the future). Mind you not everything that are classified under emergency.Your unique needs as you may call it such as feeding, shelter and clothings are not part of emergencies, therefore you don't classify them as emergency. And since they ain't part of emergencies, you don't use your emergency funds to solve them. As an investor you don't depend on your emergency funds to solve your unique needs, because your unique or basic needs doesn't fall under emergency situation.

Severe accidents, the roof of your house falling off by winds or part of your house being damaged by earthquake, fire burning down your house, chronic health challenge, floods etc. These and many for more are what are classified under emergencies. Things you don't have control over, but it happens. When things of this nature happens, only then can you make use of your emergency funds.

When investing in Bitcoin through the DCA method, it is very important to create an emergency fund, because unexpected situations can happen at any time, but an investor must always be prepared to deal with those unexpected situations. And for this, an emergency fund must be created.
Because if an investor continues to invest in DCA without creating an emergency fund, if he has to face problems in the future, where he "needs money urgently", at that time, "since he does not have any emergency fund", then he will have to sell his Bitcoin holdings by Compulsory, which at that time he may have to sell his Bitcoin holdings at a loss lower than the amount invested (if that time bitcoin in dump).
This is why in the case of DCA investment, after meeting the family and basic needs, additional money must be invested, and an emergency fund must be created, if there is an emergency fund, an investor can safely hold his investment for a long time, so he will be able to profit from long-term holdings.

Those who will hold Bitcoin in the DCA method will definitely be able to invest in Bitcoin with the remaining money left over after excluding the family or its basic expenses. That is why I say that the most important thing to focus on in long-term Bitcoin holding is to meet the needs of money.
This is a long-term investment, so I have highlighted these things the most, or you can follow another method, which is an emergency fund.
If you have an emergency fund, you can meet your unique needs in the future, then you don't have to worry about investing in Bitcoin. Some people fail in the Bitcoin DC method only because they are lazy in using their strategies.

You are very correct. It's a wise decision for a person that have a lump sum amount to accumulate Bitcoin as much as possible without delay because Bitcoin is very volatile and while delaying and still contemplating on DCA or waiting for the price to dip before buying the price may skyrocket beyond the person budget.
I think one of the reason why some investor are waiting for price to dip before they will buy or are considering DCA is because most investors lack self-confident and some are not futuristic, they cannot persever to make a longtime investment

You are getting the whole point wrong. Investors that has the money to buy Bitcoin once should do it because that seems to be the most favorable strategy to them. They can still choose to DCA, but rather they will increase the amount of money used to DCA per week or monthly however they choose to do it. The path you misunderstood this things is that all strategy is preferable based on each investors. And this is determined by their financial capability first, financial goals in the investment and their risk tolerance. This three importance things are what investors consider first before they adapt any strategy.

And mind you DCA can be adapted by all level of investors both the rich and the poor. But Lump sum is rarely adapted by the poor. Obviously they do not have the money t buy a whole Bitcoin once that's why they stick to DCA. But a rich man can DCA, Lump sum and also buy the dip because he as the money. He might just preferred to DCA because he wants to manage risk learn a few things instead of Lump sum.

Inasmuch as most investors that are financially capable may likely be nterested in buying Bitcoin at once than buying by parts I still believe there is still need to know the best strategies that will be more favourable because if one is equip with the right information it gives more confident and determination to make more significant investment.
DCA strategies is more leverage to accumulate Bitcoin and I think most investor will consider it more preferable.