An argument for Dollar Cost Averaging Bitcoin

2018 peak value

In 2018, bitcoin reached an all time high around 20,000 USD. Many people bought the top and were concerned that they would never see a return. However, three years later, we have seen a high of nearly 60,000 USD.

Why invest in such a risky asset?

There is still fear around investing in cryptocurrency. Yesterday, Bitcoin dropped donw to 42,000 USD after a crash from a recent high of 58,000 USD.

Yet, there are articles all over the internet that paint a picture of bitcoin being the greatest investment of the decade. Safe investments make less return. That is not to say that risky investments are better. The key seems to be to find an investment with risk that I understand. (howmuch)[] (yahoo)[–ivZl82PKJu-YRzRCSrekuT] (forbes)[]

Key takeaway for my investments: Understand the risk

The three year return

As it turns out, there has never been a time that bitcoin didn’t outperform the stock market over any three year period. This includes the crash from 20,000 USD that I spoke of earlier. If I had invested my life savings into bitcoin at 20,000 USD right before the crash. I still would have seen a 3X return over the next 3 years.

Calculate it yourself

This is the death for my personal investment strategy. For the last year, I have been dollar cost averaging bitcoin and comparing that against my profits from trading(which takes time and dedication to do). Setting up the weekly purchase of $100 on coinbase took me less than 10 minutes. However, my personal trading has taken more than 356+ hours of research and careful thought.

In the end, my dollar cost averaging has nearly outperformed my perfonal trading strategy with nearly no effort whatsoever. I set up a $100 per week investment in bitcoin and just let it run. If you want to see the return after 1 year of investing $100 per week you can calculate it here. If you are wondering, the return over the last year if you had invested is 39.51% with a total invested of $5,300 and a value of $7,394 as of today with a BTC valued at only 42,700 USD today(the price this morning after a 28% correction).



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