Topic: How do you assess the value of Bitcoin? - page 3. (Read 689 times)

DCA is an overall investment method that is safer than buying and selling at once, has lower risk and lower returns, but still offers the opportunity to profit from market changes.
however you also need good skills for this too, deep technical analysis is a must.
I have a regular job and have a monthly salary, and I always set aside about 20% for bitcoin purchases and I also always wait for the right time to do so considering the movement of bitcoin only increases slightly then decreases again.

agreed metrics like that one along with the mining cost window explained in my previous post are 2 main good sources to see when prices are deemed cheap or premium as an overall planetary price:value indicator

ofcourse. speculation is a funny thing.
japan has the highest electric and so even when prices were $30k-$60k they still seen bitcoin as cheap
where as kazahkstan seen anything above $30k last year as premium(time to sell)

but for a general world wide idea of if a price is leaning towards a buy sentiment or a sell sentiment. the metric you used and the cheap premium of all mining costs. is a good world wide sentiment finder

Deciding to buy Bitcoin of course at the lowest price, but because it's uncertain then I use the DCA strategy, maybe that's what many bitcoin investors do.
DCA is buying bitcoins on a regular basis, regardless of weekly or monthly prices, how do we decide, we will definitely get a good average value from buying the DCA, but if it is understood use what you can afford, I myself am DCA become my regular purchase with weekly about 20% of my income.

Personally?

Bitcoin is ALWAYS a buy.

If I have any funds available that are not already budgeted for some other expense (utilities, debt service, asset acquisition, entertainment, etc), then those extra funds are used to acquire bitcoin as soon as they are available.

In the short term, the bitcoin exchange rate is far too random and unpredictable to ever be able to consistently choose the "right" time to acquire it. Sure, you might get lucky and get it a bit cheaper if you wait, but you also might miss out on some huge growth and never see that lower price again.  Since, in my opinion, the long-term direction is for the buying power of bitcoins to increase, any delay only increases the chances of missing out. As such, in the long run, attempting to wait for a better exchange rate will only hurt your overall position.

There is a very strong human tendency to think we see a pattern where one doesn't exist, and to believe we can take advantage of that non-existent pattern for personal gain.  This has been demonstrated successfully in experimentation many times. In one example a human is asked to predict which of two events (for example one of two different lights illuminating) will happen next.  When the experiment is set up for the events to happen completely randomly, with an 80% probability of one event and a 20% probability of the other, the test subjects believe they see a pattern (which doesn't exist) and they use that pattern to try and occasionally choose the 20% event and do better than 80% success rate. The result is, on average, humans guessing the correct event only about 68% of the time.  Meanwhile, when the same experiment is performed with animals (such as rats), they quickly learn (end up trained) to consistently choose the 80% event every time. As such, the animal making the reliable choice to continuously choose the option with the higher long-term average consistently beats the human that is trying to time his decisions against a random process.

Trying to time an unpredictable market is similar.  You're going to feel like you can get it right often enough to come out ahead of those that just consistently get what they can when they can. You're going to remember the times when you got it right, and you're going to convince yourself that the times you got it wrong aren't significant or that you can learn from that event how to predict it better next time. If the failures don't devastate you and cause you to quit altogether, then the successes will fool you into thinking you're coming out ahead. Either way, in the end, there's a VERY HIGH probability that you're going to end up with less bitcoin than you could have had if you had simply purchased what you could whenever you could.

In general, those who are planning long-term investments in Bitcoin must be concerned about the price of Bitcoin. They often get stuck in the dilemma of buying bitcoins. I think first of all an investor should buy bitcoin with risk. Since Bitcoin is at its lowest level in several years, DCA is particularly appropriate at this time. Bitcoin may slowly move higher again so it is better to $19000-$25000 and hold it.

Currently Bitcoin is trading under its realized price. You can use the live chart from https://www.lookintobitcoin.com/charts/realized-price/

Assume the chart is built with correct algorithm, it shows a signal that we are in a good period and have good price to accumulate Bitcoin. When people realize it, Bitcoin will be bought up to above its realized price. Consequently you will get profit with your bravery to invest, patience to hold it and smart to take profit at right time.

Don't forget that beyond the realized price, we will have a next halving in 2024, in around May 2024. It's less than 2 years from now.

The best thing to do used to buy Bitcoin now that the price is low and who would for long time. Because if you are waiting directly when Bitcoin will bump before you can buy cryptocurrency you might not monitor the exact time all cryptocurrency Bitcoin because you must not before you can be able to interpret the chart of cryptocurrency graph before you can get the exact target of when Bitcoin will rise. It is only the traders who can predict and the falling off Bitcoin and buy and also make profit within that particular time.

First you need to understand mate that here we are talking about Bitcoins.
Secondly see the marketcap and popularity of the coin.
And then finally conclude that Bitcoins are very much value and due to its large marketcap, the price of the coin will definitely rise.
So as of me, whenever I have some money to invest, i just buy as many Bitcoins as I can. I don’t look at the price. As Bitcoins are for long term. If I buy now, then definitely after 2 years I will be get 3 times the invested amount.
Rest is up to you to decide OP.

Buying weekly is a example of DCA and I wouldn't call it a stupid idea as it has helped so many people get over the fear of taking a big leap into a high risk venture like Bitcoin, by breaking it down into smaller, achievable targets which they can easily reach without any pressure.

With DCA, you don't need to force yourself to do anything.
If your salary is xxx amount, and you can spare yyy amount every week, bi-weekly, monthly, bi-monthly, quarterly etc. Then you exchange that amount you can spare for Bitcoin. To avoid laying multiple transaction fees, you can spread out the buys a bit more.

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Of course, during periods like when the price spikes up alot, you can hold on a bit from buying and when it dips, you can buy more.
Waiting for more preferable markets between the above points (spike and dips) might not be very effective.

DCA is the best.

Honestly, if I've known the DCA strategy when I was newer then I think I've got accumulated a lot that would have changed my life entirely. Still, my life has changed wholly because of having bitcoin as my investment.

But it will be a different level if I've been doing DCA since I've started. Although, it's not too late and we'll never know how high bitcoin will be for the next years and sets of bull run.

My moto for many years was to buy on a weekly basis, with whatever disposable cash I had at the end of the week.... but I figured out that it was a stupid idea. You force yourself to buy constantly, because you want to horde more and more bitcoins like Mr Scrooge... but you making a big mistake.

The golden rule has always been to "buy the dip" .... so if you just buy on a weekly basis... you are not buying the dip. I now push my weekly disposable fiat into my exchange and I wait for the dip.... then I buy like crazy! 

using reasonable recent asics (generations post 2020)
work out the mining costs of the worlds regions. from cheapest to expensive
(~4cent to 38cents)
split the hardware cost over 2 year ROI to get a per btc COST

and that cheapest to expensive window becomes the range that the price normally sits within.
(window is somewhat stable and grows. and price within window is more volatile and unpredictable)

then simply look at where this weeks price is. to look at if you are in the cheap area of the window or the premium expensive part of the window.

then judge from there whether is a good or bad time to buy
EG section it off as like a green, amber, red where you invest 100% at green 60% at amber and 20% at red)

even for those DCA people. if you are just regular monthly purchasing. atleast try to see if the hour you do the purchase is at the weekly/month high or at a better time of day/week you can get maybe a better deal.

the closer your DCA for the month is to the monthly high, even if you still just want to buy for that 'incase this is the last chance to buy before it breaks resistance and rises more fomo' adjust how much you want to buy in to reduce risk. EG dont throw entire months excess income into a FOMO . just put 20%-60% and then put rest in later if the speculation dies down and price comes down just a little bit. that way you can maximise opportunities better

One of the biggest things that I have done in the past month is to sell stuff that I don't need (like a yard sale to get rid of unused stuff) and then put that money into bitcoin. I started this because I ran out of fiat to sell for bitcoin so I had to sell other stuff and it's been a good month since I converted goods I was not using to bitcoin that also freed up my space.

I will start with the fact that Bitcoin value is different (and imho way bigger) than its price.

Now, to your question. I don't really buy Bitcoin, my accumulation "scheme" is to sell less or more from the coins I earn (from signature campaign or other tasks).
So I sell less, pretty much based on my gut feeling and the needs of my household (for example last week I couldn't save anything, but a couple of weeks ago I've saved the full amount of the signature pay).
Of course, in crypto winter I try to save more.

Since we are in bear market, I use the 70% of the amount left from my monthly salary to buy whatever bitcoin's price at that time, while I save the remaining 30% for further dips below $18k because I don't believe we've already hit the bottomw and we are just at early phase of bear market  Bitcoin has been consolidating at $20k-23k for few days now so accumulating at this price is not a bad choice for me.

Under dollar-cost averaging (DCA), the investor divides the total investment amount and purchases a target asset in intervals. source
If I would tell my DCA , I do both trading short and long-term.Generally I look for good dip for long time investment.  Already invested a few times for my long time investment, to say that I had no idea that Bitcoin would drop below 30k like this .I have invested a few times in this way Although this brings me to 1/3 of my total ath but I am optimistic that after one or two years I will be able to earn a good profit.  On the other hand, for short term investment, I have kept a specific fund separately and do short term trading by selecting daily candles.  But I don't have any specific fund allocation for long term investment, if I have money in hand I invest according to the dip.

Lol that's obviously a lot easier said than done. There's a reason why trading in general isn't recommended for most people, and there's a reason why most people lose money trying to get in and out of positions.

Decide on what asset you want to invest on, DCA(or possibly lump sum if you don't panic), then just be patient.

It's a lot less bothersome to dca or buy lump sums at random times.

If you're aiming to buy at a price it's normally best to invest in something else and wait for that price to be reached (but if it doesn't make the news you either have to keep checking the price every few days or have an alert set up - and then hope the alert works).

Buying dips for a lot of markets (typically stocks - definitely not forex) works better than dcaing but it can be a lot more costly too (time wise) and I don't think the gain is enough to make it worthwhile (especially in tech/crypto markets).

You only need to learn how to ride the wave... any moment that you feel bitcoin is going to bump, then is a good moment to buy, and if you see it crashing, then sell and take some of your loss.

Is not about the bitcoin value, is about the market movement because if you buy bitcoins at $100k and it goes up to $1M, then you will have a huge profit even if the price was already up.

I personally DCA, but I also have a bit of money on the sidelines for buying those huge blackswan-ish flashcrashes; and then a really really small allocation for trading when I'm bored.

With most people that don't watch this space really closely though, seriously just DCA. I know trying to time markets is really exciting because it somewhat gives you an adrenaline rush, but most people will end up with a lot less(or even a loss) trying to purely time the markets.