What is "DCA"?
DCA, or Dollar Cost Averaging, is a strategy where you buy a fixed amount of Bitcoin at regular intervals, regardless of price fluctuations. For example, you purchase €100 worth of Bitcoin every Monday. When Bitcoin's price is low, your €100 buys more satoshis; when the price is high, it buys fewer. This strategy helps you achieve a more favorable average purchase price over the long term.
Thus, at any given time, even if the current price is lower than at another date, those who have invested regularly can benefit from this strategy and achieve significant returns.
If you had entered at the peak of a bull market (the highest price in fiat currency €$£), you might think you have lost 80% of your investment by the bottom of the bear market and start panicking (the lowest price in fiat currency €$£). However, if you had used the DCA strategy, your results would have been entirely different. For example, by investing $100 each week, you would have achieved a return on investment of over 102%. Even with less frequent purchases, such as every two weeks or monthly, the returns remain very attractive.
Let's compare this to inflation. The Consumer Price Index (CPI) has risen by about 12.35% since November 2021. Although this index understates the real inflation, even with an actual annual rate of 20%, cumulative inflation over this period would reach about 60%. Bitcoin has therefore largely preserved your purchasing power, increasing by over 100%.
This performance highlights the importance of adopting the DCA strategy and holding onto your Bitcoin (HODL) rather than trading frequently.
Michael Saylor also summarized this in March 2024, showing that on a 30-year chart of S&P returns, a single day each year captures 85-90% of all gains. In other words, almost nothing happens 99.5% of the time. This is why it is crucial to stay invested long-term and avoid trading, which often leads to underperformance, especially after taxes.
Daily DCA
Investing just $1 in Bitcoin every day for 4 years would have already turned €1,461 into $3,623... If you had invested $300 per month (10 times more) by cutting out various small daily expenses (easily avoidable by anyone each day), you would now have purchasing power of almost $40,000, which could be worth much more in terms of purchasing power by 2030... And this doesn't even take into account if you continue to do it daily until 2030, no matter what happens...
My friends who listened to me in 2020, took the time to study Bitcoin to form their own opinion, and then dared to invest just $4/day since the end of 2020, have already accumulated savings of around $15,000 (by slowly but surely investing around $5,000 over 4 years), a return of over 300%... (I'll let you calculate for those who set aside $40 or more per day, and so on).
So, I once again invite you to consider this if you don't want to find yourself in an even tougher financial situation in the coming years. 🙏🏻😘✨❤️🔥
Study Bitcoin !
Source & inspiration = Matthew Kratter https://dcabtc.com/