It is nice to see that monthly BTC price performance chart from that above-linked article.
Earlier I had a post from my memory in which I was thinking (and speculating out loud) that last year had both August and September in the positive, but then when I look at the actual chart of the actual numbers, I see that August was negative and September was positive, yet August was a baby negative and September was not a big positive, yet I recall that bitcoin's performance last August and September ended up being much better relative to how negative the sentiment was at the time about how August and September would perform, August ended up being way less negative than what people were speculating that it was going to be and September was not greatly positive, so we largely had flat through August and September last year which was surely seemingly better than expectations.. and at that time the BTC price was bouncing in a kind of local bottom and we hit the local bottom of $49,577 at the beginning of August but then we ended September in the mid-$60ks.
We still cannot know for sure how the future is going to work out by looking at the past, but we can still see some quite interesting price performances in which some months had very high percentages in their performance and then other months of low percentage performance, but still maybe several months in a row of positive performance that ends up adding up when we look at the prices that are underlying those percentage numbers.
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The DCA calculator I have seen through the link you dropped here had shown a precise way of calculating how much an investor might have earned investing in Bitcoin on a weekly interval. This is an eye opener to me so I wouldn't have to keep doing rough calculations when I can easily make use of the DCA strategic calculator to enhance a precise outcome pointing at how the price of Bitcoin has been moving along the years.
Yep. There is nothing wrong with doing some of the math yourself or even verifying that the calculator is coming up with the right numbers, since sometimes the calculators are not calculating properly. Also sometimes you might use the calculator to give you some rough ideas for a certain period of time and even changing various assumptions for different periods of time and then adding up the numbers.
So maybe we have a guy who might have started out investing 6 years ago, and he might have started out with $25 per week and then each year he doubled his weekly amount, we can use the tool to hone in on the numbers, and we can see that he would have had done better than the guy who kept his amount flat.. but we also likely would see that historically any guy who increases his investment amount, even doubling ever year, still would have had been way better off to try to front-load ihis investment towards the beginning, since even his increases of doubling every year would not have had done as well as investing more in the beginning.
At the same time, guys can ONLY do what they are able to do, since it is better to invest within your means rather than overdoing it and end up recking yourself and ending up with way lower quantities of bitcoin based on overdoing it... Sometimes it can be difficult to measure if we might have had over done it until it is too late, so frequently as we are growing our bitcoin investment, we likely need to figure out ways to build and maintain back up funds so that we can have money available in case we make mistakes and so that our bitcoin does not end up servicing as a back up fund, especially if we might be investing 4-10 years or longer, and many of the guys here who have done the best have had investment timelines of greater than a couple of cycles and they might have spent quite a bit of time building their bitcoin in one or two cycles without trading and/or selling, just ongoingly buying and/or HODLing during periods that they might have had run out of money.
I will like to know if using the DCA strategy only encompasses investing in Bitcoin on a short intervals? Can I also conclude that buying Bitcoin over a long period of time consecutively can be attributed to using the DCA strategy in acquiring Bitcoin? Maybe I am taking this too far but an hint would help in a long way.
DCA largely describes a way of buying bitcoin over a period of time, so you can use DCA to establish a long term position or you can use it to trade.. so that maybe you buy your bitcoin over a period of time and then you try to trade the bitcoin to buy back cheaper.
I don't recommend trying to trade bitcoin, especially while you are still building your portfolio, which can take a cycle or two or more to really build it up to a sizable amount.
But yeah in the end you can use DCA however, you like, and surely some folks will assert that they are investing even though they are trading, so in that respect, I consider anyone who either has a short timeline of less than 4 years as a trader, and I also consider anyone who builds up his bitcoin holding and then plans to sell all of it later down the road as a trader as well.. Of course, the guy who sells with an expectation of buying back cheaper would be a trader, too... I don't recommend trading, even though a lot of guys do it (or try to do it), and then end up performing way worse than the guy who had focused on ongoing accumulating bitcoin through buying only... And, the results are more clear over longer and longer periods of time, such as over a couple of cycles, it becomes quite difficult that a trader could have had outperformed the investor over a couple of cycles, and even if he did, what is the purpose? The investor has such great results over a couple of cycles that it seems merely greedy to hope for or to expect greater results than what the investor had been able to achieve over a couple of cycles.
The first whole cycle of building up a bitcoin holding can be amongst the toughest, since as you are building up your bitcoin holdings, you can have extended periods that either your bitcoin is not in very good profits or it might even be in the negative, and there is no guarantee that it is going to recover, yet still we can pick our position size and continue to invest in bitcoin and hopefully learn about bitcoin and likely see that many of us will tend to build our conviction with time and through studying bitcoin the strength of our investment thesis likely will get stronger.... yet we can still invest in accordance with the level of our conviction, and figure out an amount that is comfortable to us, whether that is $100 per week, $10 per week or some other amount that is comfortable for us in light of our conviction, and another advantage of DCA is that it is very adjustable, so that we can figure out a weekly amount that fits both our level of conviction and our financial circumstances (such as how much discretionary income we have).
Thank you for sharing the link to the DCA strategic calculator. I never knew their was a calculator that could help bringing all these to reality. My explanation seems to fall in line with the DCA and from henceforth, I will take full use of this calculator which I found high comprehensive.
DCA is quite a adaptable for anyone who has discretionary income coming in on a regular basis, whether they are rich or poor, DCA can be customized to your situation.
Yet anyone can also run across situations where they might receive some extra money, so sometimes it can be helpful to consider lump sum and/or buying on dips as possible ways to supplement your DCA strategy.
Surely one of the advantages of DCA can also be that a person can figure out ways to invest, and also to feel that he is not disrupting his life too much, yet sure the more aggressive your DCA strategy, then the more you might have to have even better cashflow management skills and practices so that you don't end up overdoing it or making mistakes where you spend beyond your discretionary income and you don't have any back up funds.
Historically, there have been some guys who have gone overboard with their investing, even when they have been using some variation of DCA to buy into bitcoin, and they end up being overaggressive and/or not having sufficient back up funds.
Investing in Bitcoin can be highly profitable and I think that was the main reason why we have been seeing big companies and government of different nations creating a strategic reserves on Bitcoin.
Every cycle there end up being ways that people blow up when the market turns.
So, yeah, you are correct that bitcoin can be greatly profitable, and many times we also have to protect ourselves from not getting too greedy and perhaps mostly holding our own keys rather than putting our bitcoin with someone else and they are promising even greater returns. We have to figure out some balance that works for us. I think that there are going to be some blow ups with some of those place in which guys are not holding their own keys, even though some might also outperform bitcoin for certain periods of time.
But, yeah those products also create demand on bitcoin and causes the bitcoin price to go up, which can also be a disadvantage to anyone trying to accumulate bitcoin to have to pay higher prices because companies, governments and even status quo rich people are prematurely driving the BTC price up... .. yet at the same time, there is not a whole hell of a lot that normies can do except to try to accumulate bitcoin through his own resources and to hope to not get recked in the process in which there are likely going to continue to be ups and downs in bitcoin.
They knew that if they could acquire large amounts of Bitcoin and holding it for several years, maybe 10 to 20 years, the value would have increased exceeding what the bank can ever afford to give you as interest on keeping your funds with them.
That is true. Bitcoin is quite likely to outperform cash and other investments.. and realistically we likely should know that cash loses value, even if there might be an interest rate, the cash may well be losing value at a greater rate than the interest rate. So we have to be careful not to be lulled into nomiinal rates.
I don't know if you recall bitcoin's dip in price in 2022, and at that time, the US Government was increasing its rates on some of its T-blills and offering higher rates like 5% or more... but guys who got lured into those products in 2022 rather than bitcoin, got screwed.. even though surely there can be ways to use some of those products to your advantage, but there can be big mistakes that are made when guys hold too much value in cash and they fail/refuse to establish a sufficient/adequate stake in bitcoin. We likely realize that the more value we build up, we likely are going to have value in bitcoin and cash and perhaps in other assets too... and even in our earliest of stages of building our bitcoin holdings we need to keep some money in cash since our bills are likely paid through some kind of local fiat. yet a balance need to be reached, and sure maybe sometimes we can build up our cash reserves to be 3-6 months, but it hardly makes any sense if we build up our cash reserves prior to having any bitcoin,
so if we have absolutely no bitcoin or ONLY small amounts of bitcoin then we may well build up our cash reserves and our bitcoin simultaneously, and then maybe once our cash reservers are around 3 months of our expenses, then we might focus more on just building bitcoin, and sure maybe we can still add to some of our cash reserves as our bitcoin investment gets bigger too... yet at the same time bitcoin's value can go up and down so the amount that we put into it can vary quite a bit from how its value might change in terms of going up and down. and sure we can keep track of these matters in terms of where we are keeping our value and how it might be changing in value over time... we can gamify our own monitoring of changes in our wealth and how we may well be ongoingly building our bitcoin investment until we get to a point that we have enough or more than enough.
If I had got that kind of money in my 20s, I wouldn't be broke now either. On the contrary. I would have bought lots of stocks (blue chips), which is what I did with what I had. Later, I would have more to put into bitcoin. I would be a whale now, possibly with a 4-digit stash. How happier would I be than I am now? That's a different question.
Sometimes mistakes are made, and I am not sure if they are more likely to be made when the money flows in too easily.
There are some folks who get rich quickly and they figure out some ways to make sure that they don't overdo it and that they are not making egregious mistakes.
I am sure that there are many of us in bitcoin who we might have had made some mistakes along the way that we regret, and they might have had even been pretty big.. so maybe instead of having 15 bitcoin, we only have 9 bitcoin or maybe we only have 0.63 bitcoin... so we think about how we might have been able to either accumulate more bitcoin or at least to better preserve the quantity of bitcoin that we had accumulated up to that point that we might have had realized our mistake.
So maybe the guy with 9 bitcoin had 15 bitcoin at one time, but he thought that he could do x, y or z, and then he ends up with only 9 BTC and realizing that he can never get back to 15 BTC based on his own financial circumstances. Of course, the mindrust situation comes to mind for some of us, too. In early 2020, 10 BTC went from $100k in value to $40k in value .. and if we have around $40k invested into it, we might have had been quite nervous from such a decrease in value.
Of course,
right now 10 BTC has a market value of around $1.13 million and a 200-WMA valuation of $520k, so surely based on the 200-WMA, the 10 BTC could support an income of $52k per year, yet it seems to me that
by mid 2026 10 BTC should be able to support a sustainable withdrawal income of $80k per year.. .. so sometimes when mistakes are made it can take a long time to get back there, and it actually might become impossible to get back to the pre-mistake location.
A lot of ups and downs have gone on in bitcoin in the past 5-ish years.. and surely, each of us might have had ONLY so much of an income that we were able to put into bitcoin, so it could be more painful to think about our not having had done than we could have done, rather than we did as much as we could have, even though we might have also made a few mistakes, and we might not have had been able to learn from our mistakes unless they were of a significantly large enough size to shock us into learning. Sometimes we might make mistakes, but not realize the ramifications and/or impact of the mistake for several years... by the time it is too late to fix the mistake and we can ONLY hopefully learn the right lesson for going forward, and some folks do not even learn the right lesson for going forward.
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