DCA: Bitcoin – Taking The Guess-Work Out Of Investing!

If you’re new to the world of cryptocurrency the prospect of investing your hard-earned dollars can be extremely overwhelming. Add in some high-level financial jargon with a side of cryptocurrency acronyms, and well, overwhelming can turn into downright paralyzing.

While there are numerous ways to make money within the cryptocurrency ecosystem, they often tend to require a substantial amount of skill and knowledge. From trading to ICO’s, to staking, to alt-coins, to mining, if you don’t know what you are doing, you’re likely to waste your time and lose (a lot) of money. With fast money, there are almost always inherent risks. The hard truth is the large majority of those trading the crypto market should not be there- especially in a highly leveraged derivative world like what is offered on Bitmex.  And this can be frustrating if you’ve been hearing from everybody and their uncle about the massive gains they have been making in the crypto-sphere (hint: beware of scammers). Bitcoin millionaires are seemingly popping up left, right and centre, and you may feel as though you’ve been left behind.

Luckily, we have some good news for the newcomers who are eager to enter the market: you haven’t been left behind and there are still tremendous opportunities to make money in the cryptocurrency world. In this article, we will outline the framework of a tried and true investing technique which has realized unbeatable exponential returns over the past few years, that requires zero skill and less than five minutes of your time per month. Sounds too good to be true?  Let us explain.

The answer lies with bitcoin dollar-cost averaging. This is not a get rich quick scheme, but a long term recipe for building wealth. What’s that saying? “Slow and steady win the race”. This highly effective strategy is established on the basis of a safe and steady paradigm. A palpable shift from the usual ‘fast and risky’ mindset that the majority of crypto traders and investors find themselves in.

Dollar-cost averaging is an investment strategy in which an individual invests a fixed amount of money into an asset over regular intervals over a long period of time- in this case, the asset in question is Bitcoin. This technique reduces the investor’s exposure to making a one-time lump-sum investment that is poorly timed with regard to Bitcoins price, essentially neutralizing the short-term volatility of the market. It also removes the need to time the market; a skill which can take years to master. At first glance, this may sound suspiciously simple, and admittedly lacks the ‘sexiness’ of the quick money made in day trading, yet time and time again, for a beginner crypto investor, this technique duplicates and even can outperform the portfolio of seasoned investors.

The general idea of the strategy assumes that prices of Bitcoin will eventually, always rise. Bitcoin is un-confiscable and that is its unique intrinsic value. Add in its scarcity, utility and transportability, and we can all but guarantee that the value will continue to increase over time. What’s much more difficult to predict, however, is by how much and by when. Will Bitcoin go to $10,000, $15,000 or $20,000 next year? With everything going on in the world today (coronavirus, economic meltdown, murder hornets… shall I go on?), a price swing below $2000 and over $30,000 are both possible and the wise hodler keeps this in mind. It is the nature of the beast. Nobody has a crystal ball to perfectly time and predict the price, but using the fundamental principles of economics we can be sure that the overall trend will be upwards.

Talking in theory, is one thing. Let us show you a real-world example of how this strategy can be put into place. To illustrate our point, the table below shows the results of dollar-cost averaging of an individual who makes a $100.00 investment on the 15th of every month from 2015 to present day.

 

Date	BTC Close Price (USD)	USD Invested	Bitcoin Purchased	Total Accumulated Bitcoin	Average Price	Portfolio Value (USD)
1/15/2015	$210.46	$100	0.4751496721	0.4751496721	$210.46	$100
2/15/2015	$234.33	$200	0.4267486024	0.9018982745	$222.40	$211.34
3/15/2015	$285.34	$300	0.3504591014	1.252357376	$243.38	$357.35
4/15/2015	$223.57	$400	0.4472872031	1.699644579	$238.43	$379.99
5/15/2015	$237.31	$500	0.4213897434	2.121034322	$238.20	$503.34
6/15/2015	$237.31	$600	0.4213897434	2.542424066	$238.05	$603.34
7/15/2015	$283.82	$700	0.3523359876	2.894760053	$244.59	$821.59
8/15/2015	$260.73	$800	0.3835385264	3.27829858	$246.61	$854.75
9/15/2015	$229.92	$900	0.43493389	3.71323247	$244.75	$853.75
10/15/2015	$254.81	$1,000	0.3924492759	4.105681746	$245.76	$1,046.17
11/15/2015	$319.93	$1,100	0.3125683743	4.41825012	$252.50	$1,413.53
12/15/2015	$465.50	$1,200	0.2148227712	4.633072891	$270.25	$2,156.70
1/15/2016	$387.66	$1,300	0.2579580044	4.891030896	$279.28	$1,896.06
2/15/2016	$399.48	$1,400	0.250325423	5.141356319	$293.82	$2,053.87
3/15/2016	$415.38	$1,500	0.2407434157	5.382099735	$296.37	$2,235.62
4/15/2016	$429.98	$1,600	0.2325689567	5.614668691	$304.72	$2,414.20
5/15/2016	$457.85	$1,700	0.2184121437	5.833080835	$313.73	$2,670.68
6/15/2016	$696.32	$1,800	0.1436121324	5.976692967	$334.98	$4,161.69
7/15/2016	$664.88	$1,900	0.1504030803	6.127096048	$352.35	$4,073.78
8/15/2016	$567.20	$2,000	0.1763046544	6.303400702	$363.09	$3,575.29
9/15/2016	$605.21	$2,100	0.165231903	6.468632605	$374.62	$3,914.88
10/15/2016	$637.37	$2,200	0.1568947393	6.625527344	$386.56	$4,222.91
11/15/2016	$711.96	$2,300	0.1404573291	6.765984673	$400.71	$4,817.11
12/15/2016	$775.48	$2,400	0.1289523908	6.894937064	$416.33	$5,346.89
1/15/2017	$822.42	$2,500	0.1215923737	7.016529438	$432.57	$5,770.53
2/15/2017	$1,009.12	$2,600	0.09909624227	7.11562568	$454.74	$7,180.52
3/15/2017	$1,259.60	$2,700	0.07939028263	7.195015963	$484.55	$9,062.84
4/15/2017	$1,180.70	$2,800	0.08469551961	7.279711482	$509.42	$8,595.16
5/15/2017	$1,697.38	$2,900	0.05891432679	7.338625809	$550.38	$12,456.44
6/15/2017	$2,456.92	$3,000	0.04070136594	7.379327175	$613.93	$18,130.42
7/15/2017	$1,993.26	$3,100	0.05016906977	7.429496245	$658.43	$14,808.92
8/15/2017	$4,204.43	$3,200	0.02378443689	7.453280682	$769.24	$31,336.80
9/15/2017	$3,678.74	$3,300	0.02718322034	7.480463902	$857.41	$27,518.68
10/15/2017	$5,697.39	$3,400	0.01755189657	7.498015799	$999.76	$42,719.12
11/15/2017	$7,279.00	$3,500	0.01373815084	7.51175395	$1,179.16	$54,678.06
12/15/2017	$17,601.94	$3,600	0.00568119196	7.517435141	$1,635.35	$132,321.44
1/15/2018	$13,585.90	$3,700	0.007360572358	7.524795714	$1,958.34	$102,231.12
2/15/2018	$10,016.49	$3,800	0.009983537147	7.534779251	$2,170.40	$75,472.04
3/15/2018	$8,256.99	$3,900	0.01211095084	7.546890202	$2,326.46	$62,314.60
4/15/2018	$8,182.18	$4,000	0.01222168175	7.559111884	$2,472.86	$61,850.01
5/15/2018	$8,724	$4,100	0.01146309171	7.570574975	$2,625.31	$66,043
6/15/2018	$6,549.24	$4,200	0.01526894724	7.585843923	$2,718.74	$49,681.51
7/15/2018	$6,360.21	$4,300	0.01572275129	7.601566674	$2,803.43	$48,347.56
8/15/2018	$6,324.29	$4,400	0.01581205163	7.617378725	$2,883.45	$48,174.51
9/15/2018	$6,280.05	$4,500	0.0159234401	7.633302166	$2,958.93	$47,937.52
10/15/2018	$6,742.52	$4,600	0.01483125004	7.648133416	$3,041.18	$51,567.69
11/15/2018	$5,466.46	$4,700	0.01829337451	7.66642679	$3,092.78	$41,908.22
12/15/2018	$3,217.01	$4,800	0.03108476505	7.697511555	$3,095.37	$24,762.97
1/15/2019	$3,568.75	$4,900	0.02802101576	7.725532571	$3,105.03	$27,570.49
2/15/2019	$3,583.61	$5,000	0.02790482223	7.753437393	$3,114.60	$27,785.30
3/15/2019	$3,998.16	$5,100	0.02501150529	7.778448898	$3,131.93	$31,099.48
4/15/2019	$5,061.90	$5,200	0.0197554278	7.798204326	$3,169.04	$39,473.73
5/15/2019	$8,114.63	$5,300	0.01232342078	7.810527747	$3,262.35	$63,379.54
6/15/2019	$8,857.19	$5,400	0.5419325994	8.352460346	$3,365.96	$73,979.33
7/15/2019	$10,850.00	$5,500	0.009216589862	8.361676936	$3,502.04	$90,724.19
8/15/2019	$10,301.44	$5,600	0.009707380716	8.371384317	$3,623.45	$86,237.31
9/15/2019	$10,305.74	$5,700	0.009703330377	8.381087647	$3,740.69	$86,373.31
10/15/2019	$8,155.13	$5,800	0.01226222022	8.393349868	$3,816.80	$68,448.86
11/15/2019	$8,463.49	$5,900	0.01181545674	8.405165324	$3,895.55	$71,137.03
12/15/2019	$7,115.08	$6,000	0.01405465575	8.41921998	$3,949.21	$59,903.42
1/15/2020	$8,809.17	$6,100	0.01135180726	8.430571787	$4,028.88	$74,266.34
2/15/2020	$9,899.78	$6,200	0.01010123457	8.440673022	$4,123.58	$83,560.81
3/15/2020	$5,343.64	$6,300	0.01871383551	8.459386857	$4,142.94	$45,203.92
4/15/2020	$6,619.00	$6,400	0.01510802236	8.47449488	$4,181.63	$56,092.68
5/15/2020	$9,306.12	$6,500	0.01074561686	8.485240497	$4,260.47	$78,964.67
	Total Invested:	$6,500
	Total Portfolio Value:	$78,964.67

 With a mere investment of $6500, this individual now has a portfolio worth over $78,000, an ROI of 1100%- an unheard return in traditional markets. The amount purchased is approx 8.5 Bitcoins with an average purchase price of just over $4260.

$100 a month is about the cost of a coffee a day, this is not an impossible number that is exclusive to the elite. This is an opportunity for the everyday person, like you and I, to have a real chance at building long term wealth and prosperity. This strategy utilizes the strong fundamentals of bitcoin to, in time, reward the investor with a large return on their capital. Time is going to pass anyway. You might as well take utilize it in such a way that builds your wealth rather than reducing it.

“Success is not a matter of luck. You have no luck if you cannot play the game. Those who maintain a position to play the game will eventually get lucky. And the amount of luck relies heavily on the strategies you develop now.” – U.O.G – Professional Cryptocurrency Trader

This is first in a series of articles about Dollar Cost Averaging. In the proceeding articles, we will further analyze this strategy, with year by year breakdowns, comparisons to traditional markets, pro’s and cons and more! Stay tuned.