Topic: Failed DCA Strategy When Buying Bitcoin (Read 561 times)

I just read through this thread in the past few days too, and there surely is quite a bit of speculation going on, including the speculation of selling seems quite ill-founded, illogical and unlikely.  There surely is not even close to enough evidence that the buyer of such coins actually sold.. or even that the buyer discontinued buying after December 28, 2022.

If we presume that the buyer was buying $1million worth of bitcoin each day for a year and a half, then surely that would be DCA, even if the amounts are a lot... and it would be DCA if they were done weekly, monthly or quarterly too.

But yeah, you can mix up your terms and mix up your ideas and call it whatever you like.

Generally, I like to think about lump sum as a kind of one time consideration about how to treat a certain amount of money that comes into your possession whether it is from some out of routine kind of receipt such as a bonus, or inheritance, sale of a property, winning the lottery, robbing a bank (not that I am advocating crime) or whatever, there comes to be a decision to make regarding whether to invest that extra money right away or perhaps to DCA it or to buy on dips... so the purchases right away could be labeled as lump sum, but yeah the categories re not exactly strict, even though surely some ways of describing what is being done is more clear than other ways of engaging in such description, and surely there can be a good amount of importance in weighing options, even if we might come to varying conclusions regarding how to label (or what to call) what we are doing (considering).

Of course in various other forum threads many of us frequently talk about how long a person's initial timeframe might be, and even though someone is investing a lot on a daily basis (such as $1million), we cannot really know or presume his circumstances, yet there could be a lot of circumstances in which a person like that would not need to go through a long period of accumulation in order to meet his accumulation level goal/target...

So what might such target be?  If his investment portfolio is $5 billion or something like that, then we might speculate that he might have been working towards getting to 10% of his investment portfolio in bitcoin  (assuming that he ended up investing around $500 million), but that kind of a budget (investment portfolio) would not apply to very many folks or institutions, so surely we cannot really know the size of his budget, and even if his total investment portfolio were close to $1 billion, we might say that investing $500 million-ish is overly accumulating in bitcoin, but surely there could be some folks who might be o.k with having such high allocations to bitcoin, even though having such high allocations might not be so prudent or practical for someone who has a much lower budget.

For example, a guy who might have a $50k per year income, might have and investment portfolio that is $100k, and maybe he is able to invest $100 to $200 per week into bitcoin, and so ongoingly investing - especially when the market is down (such as what the $1million per day investor did in this case) may well contribute towards reassessment of strategies after the BTC price ended up going UP 2x from his likely average cost that would have had been around $29,500 per BTC or something in that ballpark range.

Many of us know that in bitcoin, a 2x price appreciation might not even be something that necessarily compels us to take any actions or to conclude that the BTC price had reached its top... so someone who ends up being around 2x in profits might not necessarily sell any BTC, and may even continue to accumulate BTC, depending upon his own particulars.

Many times we also talk about general principles in regards to making sure that you accumulate bitcoin for at least a whole cycle and don't fuck around with trading during that time, just focus on accumulating bitcoin for a whole cycle and then reassess your situation after a whole cycle.  These kinds of restrictions might also not really apply so much to someone who may have had the means to front load his investment  - even though surely my own recommendation would not involve getting in and out of BTC positions over less than a whole cycle, but at least anyone who had front loaded his bitcoin investment in the first 1 or 2 (which may be the case with the $1million per day guy), he ends up having more options in terms of the potential that he had frontloaded his investment, and there are advantages in terms of having your BTC portfolio in profits, but there are not as many advantages as a likely plan that involves ongoing holding of BTC that allows for compounding of value over the years, even though surely the compounding of value is not guaranteed, so each of us has to make choices regarding how much of our BTC holdings we are holding for long term or maybe if at some point we also might be ok with engaging in some withdrawals, especially if we might consider such withdrawals in sustainable withdrawal system.. that become more likely to become applicable if we had already accumulated and/or overaccumulated our BTC stash versus those folks who may still be in their accumulation stages would not have such options to justify their engaging in such sustainable withdrawal strategies if they had no yet met or exceeded their BTC accumulation goals..

Firstly thanks bro, i was discussing the same DC-related topic a while ago, and your mention helped me to put some part of inefficiencies in profitability possibilities in DCA that can help some blind DCA lovers avoid serious loss. So I've quoted this thread there so people can check this thread to have a different angle on DCA.

Secondly, Thanks sir I will follow your advice from the bottom of my heart. From now on the old GF - DCA is my only wife so you can say DCA is my life partner now but i can't...... haha just trying to have some fun.

Many times we get excited and make wrong decisions. But we know that patience here has great benefits for me. But, we still can not have that patience! Why? This is a bad habit of many people. Due to this bad habit they often suffer losses.

When it comes to buying Bitcoins, the DCA method is a much more efficient and profitable method. However, if you accidentally buy bitcoins by ignoring the DCA method, you must be patient and learn from your mistakes. There is no need to panic or get excited when the market goes down. In such a situation, the possibility of making wrong decisions is high. Remember, Bitcoin has not disappointed the patient so far. No matter how you invest in Bitcoin, one thing you need to keep in mind is that the investment should be long-term. But I will give most importance to DCA method.

It's a shame that this incident happened to this person, it cannot be denied that sometimes if something happens in our lives, we have arranged it in such a way for that person's future, we have sorted out our money well, whether it's an emergency fund or an investment. Like it or not, if we no longer have emergency funds in any way, whether we like it or not, our investments will definitely be impacted by the problems or difficulties we face in life.

There are two transactions, assume so, but you can not say the out transaction is for selling.

It can be just a change in storage from one wallet to another wallet, from hot to cold wallet like centralized exchanges usually do.

Last out transaction is https://bitinfocharts.com/bitcoin/block/779489/bc1qw0pswznckx7s6tjmd2f5hrx4q6kc5nyrdxku50
to this address https://bitinfocharts.com/bitcoin/address/bc1qnujzvts45qka3cr2eqqw8ur3q6g6s0ze2wlk5m

If you look at the transaction history, it is more like a wallet reshuffle, with 1 BTC transaction firstly as a test, then another big transaction to move bitcoin to that address.

I doubt that the owner did those transactions to take profit or take loss (as you assumed so).

I can't really explain the exact date and time he bought and sold all his bitcoin holding as the information is in the link provided by the op. But to whatsoever be the case I believe that the real cause of his selling was for one thing or the other which I believe it's not a good reason for him to sell. As we have been taught that HODLing for long is more reliable even though it may as well be risky and may also not be assured. bitcoin growth price as of july: 2021-07-25 to December: 2022-12-28 that was a good time of buying compeard to now, he could have made alot of profit if he sold 2024 or maybe in 10 years from now. I consider his method as a lump sum method because I dont see anything relating to DCA. For me I count any method of Buying as a good one despite how he baught it. I don't consider it a fails strategy according to the op, but where the failure comes as a result of selling his bitcoin holding in an inappropriate way. Buying bitcoin is never a problem but selling without a good plan it becomes the problem.

This also proves how important it is to select the right entry point when we start to do DCA, the commitment that person showed at the beginning is exactly what you are looking for on someone that is willing to use this strategy, unfortunately for him it was difficult to select a worse moment to begin to do this, so it would not surprise me if he gave up and sold his coins for a loss, however if he had started to perform this strategy once the market had crashed already it is quite likely he will be experimenting some profits already.

I think you're slightly missing the point here. Yes the whale held the Bitcoin in one address, but because of the DCA, it was several (dozens) of different inputs. Therefore the consolidation was of various inputs into singular inputs - as is always the case with consolidation of funds - that naturally per tx was a single address. Sure on the face of it it looks like the individual simply transferred Bitcoin from one address to others, because that's what happened, but we're talking about numerous inputs into one address being consolidated into a few others, that's the take away here. Hope that the explains what you were questioning.

Who would really be on their right mind will really be selling off on cheap or in negative? Remember that you are holding bitcoin and not some fly by night project or altcoins in the market which means that potential and chances about recovery is really indeed high considering its really that sitting on the top of the market rankings, which means that community support is immense.Although we do really just have that market
which is really that truly unpredictable and there's no way that we could be able to tell on what would gonna happen in the future. This is why we do really make out mistakes and bad decisions just because of totally random and unpredictability but just like the rest been saying that DCA on bitcoin is much more worth. You might be seeing negatives but on the time that the market would really make that recovery then
you would really be telling into yourself that you have done such good decision.

It is really just that there are people who are really that impulsive when it comes to price movement is on which on the time that they do see its dipping then they do really panic.Yes its normal since we are
just humans but with due experience and other knowledge that we do have able to get and gain along the way.Then we do really be able to make up that good decisions basing into that.

Yeah if he/she decided to do DCA then selling at these times is not worth it because when we talk about million dollars investment then you should be careful with it and have patience for actual profits to land in your bucket but you see it's our personal call and I would say 3 years time period is good when it will definitely will be more then ATH of $68k so hope for best.

Exactly, this DCA is indeed very suitable for use in the long term, especially in preparation for the next bullish era or targeting a certain period. If the city does DCA and panics every time there are market drops or corrections, well, it's not going to end well.
but, if he decided to sell the BTC under the rate and was not patient,he will exaxtly make the mistakes. except, there is something bad happenned to him and he must sell his BTC for some very important reasons. Because actually we don't know what happen to someone out there.

Man that is so sad and so stupid at the same time. He did DCA right at the point where bull run peaked and kept doing it till we went rock bottom. Even though based on his average price he still might get profitable very soon, might be in just a few months, but this is a very bad way of investing to be honest, you should keep DCA on different levels of price and not only date based DCA so in case price goes up you don't need to do a DCA.

Blind movement?
Trying to understand why he followed to Buy BTC continuously while He knew the market is in Reverse mode and unfortunately, he sold on the wrong time His dedication in 2022 Buying BTC on every spot is really appreciatable.

All i can say is Holding can reward massive in coming time my view.

Logically when that person has a lot of bitcoins it makes me think that the owner is a person with experience. So emptying his wallet doesn't mean he sold it, and I think more that he did move it to another wallet. I don't think anyone who is ignorant or new to this space would have that kind of money in their wallet.
I agree with you that experience investors will hold on no matter what, no matter how bad the amount in their portfolio is, they will not easily give up and take a loss.

When exchanging through a bank transfer, the guarantor's wallet is probably used, but if it is an exchange for other cryptocurrencies, then a direct transfer of bitcoins is also possible.If this whale was engaged in consolidation, then why did he first store bitcoins in one address, and then decided to distribute them between different addresses?

While true, this is usually done OTC rather than independantly for such large amounts (unless someone has a very good reputation for do a high-risk trade). This is because it involves an escrow, or at a minimum a middle-man. So the fact the coins went directly from A to B without going from A to B to C suggests there were no OTC translations or middle-person facilitating such a trade. Also probably worth pointing out that the large institutions that facilitate OTC trades usually have their wallet addresses listed on the various different block explorers as belonging to X,Y,Z, so it's often quite transparent when these OTC trades occur.

As I said initially, if you look more in-depth at the individual transactions, there's no denying it's a consolidation of funds and nothing else. Whether or not they are sent on elsewhere would be a different story.

As a Whale, then you wont really be that so dumb for you to sell on lose specially that even on small percent movement you would neither be gaining or losing, but basing up on the price on which he do
able to get in then he's still definitely on negative as of this moment on which it would be understandable that he had stopped on DCA on the time that he do sees that the price goes down even more.
For now then for sure that he's still monitoring up on his holding but dont mind on touching it out.

There's no sense that you would be selling out in loss. The great missing opportunity on here is that on the time that Bitcoins price hits up $15k on which it is the sweetest spot for you to DCA
if you do have millions of dollars but since this market is unpredictable then you cant really tell on where it would be going and this is why these kind of mistakes and missed
opportunities is really that something very common but doesnt mean that it would be over. As long you arent selling it on loss then those arent considered to be a total loss.

Since it is very clear that if he sell now, he's going to be on a bad lose and sending it to another wallet is the est idea looking like he might have sold it. Rich people don't buy to sell at lose unless the unbearable happens. It is only an average man that would buy Bitcoin to hold for long and sell it due to financial problems he might to facing having no alternative of getting funds to settle his bills than to sell his holdings and settle his problem.

 The rich would always want to hold for a long time so that that can have a taste of the benefs when the value of Bitcoin appreciate very well. We cam decide now when the value of the Bitcoin is being sold or is transfered to another similar wallet.

If it was a sale of coins, then their owner probably did not sell bitcoins on the exchange. There are many other options outside of stock trading for large transactions. There were options about violating the security of the first wallet.
But if the owner was not afraid to keep all the coins in one wallet, then he was not afraid of spying on his coins.

when it's certain that the market is ready to drop ,Another strategy which I have used in addition to DCA which has profited me in the past is starting to buy first with little amount of money and increasing it while the market dips down, for instance if BTC is expected to drop down from the price of $30k to $25k or lower to start your accumulation you can start by increasing your buy orders with a difference of $5, $10 or whatever price difference that suits you, let's say you buy $10 - $15 - $20 - $25 - $30 - $35 - $40 - $45 - $50.