Topic: "Lump sum Vs DCA" for Bitcoin Accumulation - page 2. (Read 663 times)
Even if I had the capability to do a lump sum, I wouldn't do it. I'll still go through the slow process of DCA so that I can see every potential time to enter. DCA is an investor-friendly strategy, no matter how risky your approach to the market or how conservative you are, this is the best way to go. And it's proven and testified by most of the folks here that DCA is the best strategy whether you're a big investor or a small one or just someone who's speculating and starting out. But if DCA doesn't work for you and you're a different type of investor and you see other strategies work for you best, you don't have to do what everyone is doing. Because who knows if you'll be successful there and I think that no matter what it is, we're all going to meet at the end of it and we all have one approach whether lump sum or DCA or any other type and that is we all gonna hold.
We often see questions about the best time to buy Bitcoin. People are afraid to make a mistake and buy expensive. Therefore, DCA will be the best choice for those who are cautious but still want to invest in Bitcoin. However, some people received a large amount of money and invested it entirely in Bitcoin. Both this and these are normal; it all depends on how much a person determines for himself the funds he is willing not to spend for some time. I would say that the DCA method is more simplified for the average person with a certain income from which he can save a certain amount. A lump-sum contribution is more suitable for businessmen with their businesses, from which they receive a good income.
On the other hand, Lump-sum investment can be useful and maybe not. As i aforementioned that we can't time the market. So, what will happen using this strategy for BTCBTC accumulation? The person will buy Bitcoin at higher price or maybe at lower price with full of his investment at the same time. Sometime, he/ she fell prey to FOMO because he/she is waiting to see more dip for his accumulation of Bitcoin. In case, if it do not happen like price will not go more down he/she will miss his/her great opportunity of buying. Why i don't like Lump-sum investment because we have to invest our whole amount at the same time for accumulation of BTCBTC.
Let's not underestimate lump-sum buying too much. Let's not go down the road connoting that DCA is wise, right, recommended, and so on and lump-sum is wrong and all the opposites. Yes, we cannot have perfect timing, but resources are available. You can study and analyze Bitcoin's movements and tendencies perusing all kinds of Bitcoin charts and tools. From there, you can set a price or a price range for your lump-sum purchases.
Take note that lump-sum doesn't necessarily mean one-time purchase. You can buy right now with most of your money and set aside the remainder in case Bitcoin drops back to $20,000 or below. Or you can divide your money into 3 parts and use 1 part to buy today, keep the other 2 in case Bitcoin drops, but if the price rises instead, use 1 part to buy at $30,000. The other one is reserved for the worst case scenario. This isn't strictly the DCA that everybody is talking about, but I think this is also a good approach.
"You can buy right now with most of your money and set aside the remainder" - means that you just made an initial investment, and you still reserved some money for your next investment in case the price of Bitcoin drops. The fact that an investment was made/planned to be done in a different timeframe, you can't treat it as a lump sum anymore.
We really can't deny that the wisest strategy to accumulate Bitcoin is DCA. By regularly investing, gives the advantage of reducing the effect of volatility during our accumulation of Bitcoin. Also, if ever the price of Bitcoin suddenly drops, you won't be thinking of whether you will buy or not, because you already planned on regularly purchasing Bitcoin.
There is no single strategy that is most profitable at all or at all times. There are profitable strategies such as DCA and strategies that are more profitable in the short term or at specific times.
Buying now for $30,000 instead of buying $1,000 for 30 months is the best, and therefore Lump Sum is the best FOR NOW because you are buying at the bottom instead of distributing the buying times. It will differ after 30 months, as DCA will be the best given that we are in a downward curve and buying with Lump Sum. It means a real loss because you are buying at the top.
A good trader is one who knows how to diversify between these strategies according to the market situation.
Buying now for $30,000 instead of buying $1,000 for 30 months is the best, and therefore Lump Sum is the best FOR NOW because you are buying at the bottom instead of distributing the buying times. It will differ after 30 months, as DCA will be the best given that we are in a downward curve and buying with Lump Sum. It means a real loss because you are buying at the top.
A good trader is one who knows how to diversify between these strategies according to the market situation.
First, I like your in-depth research and DCA vs. Lump-sum strategy comparison. This isnt just an investment strategy; its a reflection of human behavior and risk. You've highlighted the BitcoinBTC market's unpredictability, which shows its nature and our relationship with uncertainty. Do you think its more about us than the market?
Whatever you think of FOMO, its widespread. However, knowledge is the elephant in the room. Knowledge empowers some but causes FOMO for others. Why? Because knowledge reveals what one may be lacking. Understanding cryptocurrencies requires self-awareness as well as market knowledge. Strategy and psychology dance constantly. In this dance, every movement and decision reveals more about the dancer than the dance.
Whatever you think of FOMO, its widespread. However, knowledge is the elephant in the room. Knowledge empowers some but causes FOMO for others. Why? Because knowledge reveals what one may be lacking. Understanding cryptocurrencies requires self-awareness as well as market knowledge. Strategy and psychology dance constantly. In this dance, every movement and decision reveals more about the dancer than the dance.
On the other hand, Lump-sum investment can be useful and maybe not. As i aforementioned that we can't time the market. So, what will happen using this strategy for BTCBTC accumulation? The person will buy Bitcoin at higher price or maybe at lower price with full of his investment at the same time. Sometime, he/ she fell prey to FOMO because he/she is waiting to see more dip for his accumulation of Bitcoin. In case, if it do not happen like price will not go more down he/she will miss his/her great opportunity of buying. Why i don't like Lump-sum investment because we have to invest our whole amount at the same time for accumulation of BTCBTC.
Let's not underestimate lump-sum buying too much. Let's not go down the road connoting that DCA is wise, right, recommended, and so on and lump-sum is wrong and all the opposites. Yes, we cannot have perfect timing, but resources are available. You can study and analyze Bitcoin's movements and tendencies perusing all kinds of Bitcoin charts and tools. From there, you can set a price or a price range for your lump-sum purchases.
Take note that lump-sum doesn't necessarily mean one-time purchase. You can buy right now with most of your money and set aside the remainder in case Bitcoin drops back to $20,000 or below. Or you can divide your money into 3 parts and use 1 part to buy today, keep the other 2 in case Bitcoin drops, but if the price rises instead, use 1 part to buy at $30,000. The other one is reserved for the worst case scenario. This isn't strictly the DCA that everybody is talking about, but I think this is also a good approach.
Lump sum and DCA are just two terms for investment strategies - but they are also mutually beneficial if you are a long-term investment holder. Someone who can save $200 at the end of the month can invest with lump sum 1x/ month - especially during a dip. They can do it consistently with the same amount every month - meaning they also do DCA 12x a year with $200 every month instead of buying $600 every 4 months.
I actually don't have a problem with the two strategies above as long as they are long-term investments - that's because the end goal is to generate profits. It takes good analysis to determine whether you need to buy a lump sum or do a DCA to get a lower average price - but I can combine both and adjust to market conditions.
I actually don't have a problem with the two strategies above as long as they are long-term investments - that's because the end goal is to generate profits. It takes good analysis to determine whether you need to buy a lump sum or do a DCA to get a lower average price - but I can combine both and adjust to market conditions.
Yes, it's just how this two strategies fit individually. There are investors who doesn't have that lump sum in their pocket to buy big amount of bitcoin. And so even if they want to buy in just one get go and put it in their wallet for a long time, it will not be work for them. But for whales they can do that as they have deep pockets.
And so majority of us could have been buying bitcoin in a weekly basis or worst just once a month depending on our budget. And so it is still very effective strategy. It might take though mental toughness to buy in the long run, but it's worth it.
I think there is a ton of thread like this but if you want an "Accumulation" you better use DCA rather than Lump Sump. I have been tested a new strategy on my stock portfolio but It is can be used in any market when the price goes down from my entry price I will AVG Down until the market turns green.
When you already made a profit from your entry zone then you can avg Up I'm usually wait for 5~10% from entry zone before avg up.
Lump sum strategy is great when the market is confirmed in bull season and very bad at the current market/bear season
When you already made a profit from your entry zone then you can avg Up I'm usually wait for 5~10% from entry zone before avg up.
Lump sum strategy is great when the market is confirmed in bull season and very bad at the current market/bear season
DCA is good, but there are sometimes that you will leave DCA alone and invest big amount. Let us say that you have been DCAing since some months ago and the price of bitcoin within one week fall to $20000, if you have money that you can use to invest at once, you will not hesitate but invest it immediately becuase you have speculated that bitcoin price may not fall further.
DCA is good when you do not know if the price of bitcoin will not increase or decrease. Or if you do not have enough money to invest at once.
You may invest at once if you analyzed the price of bitcoin is low already.
I would say that that is the main reason for doing DCA: not too many people can afford to put down a big amount of money all together, otherwise the other case would be to delay the purchase, keep accumulating money and in the meantime hoping that the price won't go up. Right now is a good price for a lump sum, maybe if goes down a few thousands dollars but it's still good, anyway purchase below $30k for me is good actually. DCA is good when you do not know if the price of bitcoin will not increase or decrease. Or if you do not have enough money to invest at once.
You may invest at once if you analyzed the price of bitcoin is low already.
DCA is good, but there are sometimes that you will leave DCA alone and invest big amount. Let us say that you have been DCAing since some months ago and the price of bitcoin within one week fall to $20000, if you have money that you can use to invest at once, you will not hesitate but invest it immediately becuase you have speculated that bitcoin price may not fall further.
DCA is good when you do not know if the price of bitcoin will not increase or decrease. Or if you do not have enough money to invest at once.
You may invest at once if you analyzed the price of bitcoin is low already.
Investors may go for either of the two, it is what the price of bitcoin is at that will determine that.
There is also a time that investing is not good, when bitcoin has increased significantly several times.
DCA is good when you do not know if the price of bitcoin will not increase or decrease. Or if you do not have enough money to invest at once.
You may invest at once if you analyzed the price of bitcoin is low already.
Investors may go for either of the two, it is what the price of bitcoin is at that will determine that.
There is also a time that investing is not good, when bitcoin has increased significantly several times.
If you are doing a 100$ a week DCA that is 5200 in a year. and 10,400 over 2 years.
You should have a 2 shot lump sum set up. say 2600 two times or a possible 5200.
If you get a 15% drop or a 20% drop do the 1 shot. Hold the other back
In conclusion, DCA is still a great way for us to make money in the future. As you demonstrated in your example, it's not awful after two or more years; you'll undoubtedly make a profit in the future. So, as I see it, the halving is coming, and many individuals will profit from it starting next year until the bull run ends in 2025.
Many individuals are aware of the impending halving and bull run, based on what I observed today. If I had two halvings passed, I would not have saved anything, but this time with DCA, I can see and believe that I will make a profit. Our other Bitcoin and crypto groups are also present.
Developing the discipline to follow the DCA as it is supposed to be can pose a very challenging task. Even calculating what percentage of your income to put into the DCA that will not affect your personal needs so much, can also be another obstacle. So even when the DCA method seems so easy, it requires some technicalities that may require serious mental input. In other words, the DCA method is very easy to understand in theory but may require some level of discipline to execute.
To be fair, investing in itself requires some level of discipline to be able to come out a 'winner'. It's just the fact that dollar-cost averaging is far easier to take in for your average person compared to lump sum investing — which can be far more mentally taxing when deployed in a less-preferred moment.
For me, setting up a lump sum investment in the crypto industry is reserved only for those who have the discipline to save money that would be allocated for crypto, and besides that it's going to take a long-ass time before you can even hope of ever investing in crypto if you're going for the lump sum route. On the other hand DCA is for everyone, due to the fact that it goes for consistency rather than the amount of money that you're willing to put to stake, you're guaranteed to always have a position in place for crypto regardless of what happens.
That's why I always advocate for DCA no matter what type of investor you are. Having the confidence that you always have bitcoin investments ready for taking gives you indispensable peace of mind.
That's why I always advocate for DCA no matter what type of investor you are. Having the confidence that you always have bitcoin investments ready for taking gives you indispensable peace of mind.
It doesn’t really matter as long as you are in. People can make arguments for either method but as long as you are buying bitcoin & willing to hold long term that’s all that matters. Bitcoin is the greatest innovation, best performing asset this century. You simply have to own some, do whatever it takes.
DCA is the best strategy but if you can do both, why not right? When doing lumpsum, it means that you're able to do that and much better to put that way when you've got money ready so that it won't be spent to something else.
That's what always happens when you're about to invest and something comes asking for that money and you're missing it again because you are doubtful and haven't decided yet. It is why if you can do both for sometime, do it but at most times is to DCA.
That's what always happens when you're about to invest and something comes asking for that money and you're missing it again because you are doubtful and haven't decided yet. It is why if you can do both for sometime, do it but at most times is to DCA.
It is known that DCA is a friendlier approach for investors that does not have huge amount of money to buy at once or lump-sum. With DCA an investor can put in an amount over a long period of time, may it be in fix interval with the same amount or a random dip interval with variable amount. I would also prefer DCA over lump-sum since the only advantage of a lump-sum is buying at a market when it is at the bottom which we can rarely time correctly.
DCA is good actually but not everyone knows how to use it. As for me I like DCA but for real i don’t really know how to use it, so I use smart portfolio.
There is nothing hard about DCA. It means dollar cost average. Not necessarily dollar as it can be in your country's local currency. All you have to do is to be using certain amount of money to be buying bitcoin every week or every month. But people use to refer to it as buying bitcoin every week. With that you will be able to buy bitcoin at varying prices.
I'd choose lump sum because I've seen analysis of both of these options and lump sum investors usually do better, especially if you don't have any bitcoin yet.
I'd say that when you're starting with bitcoin and have completely none of it, you should get some.
If you're afraid of not buying at the top, the rule of thumb is to look at the average price. If we're below or at the 200WMA line, it's a safe price to buy. You can also buy above it, but if you buy below the 200, you're not going to feel a lot of pressure while holding, as bitcoin tends to hold near it most of the time.
Anyway, lump sum is usually better, especially when bitcoin gains value, and since bitcoin is mostly up in the long run, you're putting yourself at a disadvantage trying to DCA into an appreciating asset.
I'd say that when you're starting with bitcoin and have completely none of it, you should get some.
If you're afraid of not buying at the top, the rule of thumb is to look at the average price. If we're below or at the 200WMA line, it's a safe price to buy. You can also buy above it, but if you buy below the 200, you're not going to feel a lot of pressure while holding, as bitcoin tends to hold near it most of the time.
Anyway, lump sum is usually better, especially when bitcoin gains value, and since bitcoin is mostly up in the long run, you're putting yourself at a disadvantage trying to DCA into an appreciating asset.
The investment strategy would be different for each individual. Because everyone's knowledge about crypto isn't the same, we have to make decisions based on experience and available funds. If we don't have enough funds, the DCA strategy would be hard. DCA is preferable to investing than all at once, in my opinion. So in the event of an unexpected dump, we can accumulate more BTC. If we invest all together, then we can't take advantage of an unexpected dump.
I would go with the lump-sum, assuming you mean a big amount when the price drops. That once held for long gives you enough price to sell at a decent profit. This means that instead of buying every month in DCA you buy once every 4-6months during a bear market and you sell like that in a bull market. Use the profit to buy back at the next bear market and continue to multiply your money.
You are totally right about lump-sum, and I will also go for lump-sum, but if I had enough funds to do it, like if back in 2014 or 2016 I had $100k and I wanted to invest in BTC, then of course I would lump-sum, but there is another factor to it that my mindset about BTC might not be the same as it is now. So, the doubt in the mind about investing in some asset will remain there forever.And it will also impact the choice of lump-sum or DCA. Let's say if I ask my little brother or any friend who doesn't know about BTC, if he wants to invest in BTC, what he will choose, lump-sum or DCA, he will decide on the basis of the money he has, then he will look at how much profit he can make with each strategy and in how many years. These are all the factors that make a person choose DCA and Lump-sum.
This needs patience and by that I mean a lot of it. Fortunately I can do that because I have other sources of income. So that cushioning is needed for anyone attempting this method.
Exactly, both methods work for different kinds of people; DCA is for the long term, and lump sumers can make a profit instantly. DCA is good when you do not know if the price of bitcoin will not increase or decrease. Or if you do not have enough money to invest at once.
The way I see it, the most important is how much money you have and how much income.
A person with no savings isn't affected by inflation much
Someone with a steady income can allocate a part of it into bitcoin, choosing to DCA
Someone who has a lot of saving and a steady income should really think about whether DCA is better than moving some of that fiat money out of the bank and into self custody.
A person with no income but a lot of savings doesn't have to DCA at all. For such people lump sum is the best.
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