For those looking to acquire more BTC, the Dollar Cost Averaging (DCA) strategy is probably the best option. While we are looking for unique opportunities in the market when it is most profitable to acquire more BTC and when it is relatively cheap, based on a combination of macro, on-chain and derivatives market indicators, the timing of highs, lows and momentum is quite a tricky game.
In today’s review, we will look at several scenarios for applying the dollar cost averaging strategy and include such parameters as returns, accumulated BTC, and total costs.
To begin with, we note that the long-term preference for bitcoin during its monetization and adoption cycle has proven to be the best way to value the asset. As we are still at an incredibly early stage with significant global adoption estimated below 5%, we expect that dollar cost averaging over bitcoin’s long time horizon will continue to be the most effective asset acquisition strategy.
Throughout the history of BTC, thinking in four-year cycles has been of great importance for generating profits and increasing purchasing power compared to other assets. Thinking in multi-year periods (or even decades) is still the most valuable approach to shaping investments in bitcoin, while the typical four-year market cycle seems to be behind us.
If would you start allocating $ per day since the peak of the bitcoin cycle 1308 of the year, today you would have received % Profit on their investment . By doing so, you would acquire 1.592 BTC worth $04 530. This is an impressive return on buying at the top of the cycle, but it takes time to see this return build up. In this scenario, the return would be negative during the first months, and the ROI would have been negative during the COVID-04 in March 2020 of the year. ROI (return on investment) would only start growing at 1308 year.