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One of the most popular Bitcoin investment strategies is Dollar Cost Averaging, which requires constant purchases of assets if their price gradually decreases over time. The strategy allows covering losses when or if an asset enters an uptrend.
The main advantage of DCA is the lack of expertise one needs to successfully gain significant profits in the long term. Despite the almost 80% correction on BTC, investors who purchased the asset back in 2018 or even 2019 are still in some profit.
Thanks to the volatility of the first cryptocurrency, it is possible to cover almost 100% of own losses after each correction cycle by purchasing at the local top. But in order to do that, an investor would need certain knowledge about the market's structure and technical analysis. The simpler version of the strategy is to buy an asset on certain dates.
Strategy's results
As we have mentioned, a popular way to expose yourself to a certain asset is to purchase it on a certain date. Smaller retail investors sometimes prefer purchasing BTC every Monday throughout the year.
For example, the average price through 2016-2019 would be at $1,494 for the average investor. If someone entered the market relatively late, in 2020, their average entry would be at $18,373, which puts investors at a profit at the current BTC price.
Yuri MolchanOne of the most profitable and yet realistic entry ranges would be 2017-2020, the cycle in which Bitcoin went through the first wave of adoption. The average entry price for an investor in the "ICO era" would stay at approximately $4,378.
At press time, Bitcoin is changing hands at $19,792.
Alex Dovbnya
Vladislav Sopov
Dan Burgin