Recent analysis reveals that investors who have consistently applied the dollar-cost averaging (DCA) strategy into Bitcoin are now profitable, regardless of their investment duration. This strategy, which involves making regular purchases of an asset for a fixed dollar amount, has proven effective even amidst Bitcoin's renowned volatility. Despite Bitcoin's price being down over 50% from its all-time high, the weighted average cost of purchased Bitcoin indicates that all DCA investors are in the black.
DCA is a method meant to mitigate the volatility of markets like Bitcoin by spreading buy orders over time. This approach is preferred by many investors as a wiser alternative to active trading, given the unpredictable nature of the cryptocurrency market. As of July 3, the weighted average cost of purchased Bitcoin was $31,233, its highest since June 2022. This indicates that even when Bitcoin's price is down, consistent investment through DCA can still yield profits.
Saifedean Ammous, the author of "The Bitcoin Standard," highlighted that regular stacking through DCA is profitable for everyone, even when Bitcoin is down 55% from its peak. This sentiment underscores Bitcoin's strength as a saving technology. However, this conclusion is not without contention. CryptoQuant, a crypto market intelligence platform, notes that those who started DCA during the last bull market (mid-June 2020 to September 2021) are still not in profit, with their weighted average cost per coin ranging from $31.4k to $35.3k.
Overall, while DCA has proven to be a successful strategy for many Bitcoin investors, it's important to recognize that the approach may yield different results depending on the market phase during which one begins their investment journey.
Disclaimer: Please note that the information provided in this article is based on the referenced research articles. It is essential to conduct further research and analysis before making any investment decisions. The cryptocurrency market is highly volatile, and investors should exercise caution and consult with financial professionals before engaging in cryptocurrency trading or investment activities.
