Daily Bitcoin Investors See 40% Growth Over 2 Years
A committed, consistent practice of purchasing Bitcoin over two years has resulted in significant gains for investors when compared to other asset classes. Despite entering the crypto market during a challenging period, those who have been steadily accumulating Bitcoin have seen a 40% increase in their investment as of Thursday.
Embracing Bitcoin Dollar Cost Averaging (DCA)
Dollar cost averaging (DCA) involves the regular purchase of Bitcoin in fixed fiat currency amounts at consistent intervals, such as daily or weekly, regardless of the asset’s price fluctuations. This investment strategy is popular among individuals seeking to mitigate the challenges of timing volatile markets and aim to utilize Bitcoin as a long-term savings medium.
According to Dylan LeClair, a Market Intelligence Expert at UTXO Management, this approach has proven to be notably more profitable for Bitcoin investors compared to traditional financial (TradFi) investors. During the same time frame, diligent purchasers of gold and SPX have reported a mere 5% profit, while long-term U.S. bondholders have experienced an approximate 14% loss, excluding dividends.
Examining the Pros and Cons of DCA
Despite the volatility of the market, data from CryptoQuant indicated that initiating a DCA strategy during most periods when Bitcoin was trading at $30,000 would have delivered profitable outcomes. Nevertheless, there were exceptions, spanning from June 2020 to September 2021. LeClair’s current data further illustrates a reduction in unprofitable entry points, emphasizing the resilience of Bitcoin DCA.
For instance, investors who initiated their Bitcoin DCA strategy during the previous all-time high of $64,000 in April 2021 would still have gained a 27% profit to date. In contrast, Nasdaq investors would have seen a 13% gain, while gold and bondholders would have reported 6% and -17% profitability, respectively.
Furthermore, commencing a Bitcoin DCA on January 1, 2021, would have resulted in an 87% profit, considering the 400% surge in Bitcoin’s actual price since that time.
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Concluding Thoughts on Bitcoin DCA
Overall, embracing a DCA strategy for Bitcoin investment has proved to be a lucrative approach for many individuals, providing a hedge against market volatility and offering long-term financial rewards. Despite the challenges and fluctuations within the crypto market, consistent accumulation of Bitcoin has shown significant potential for attractive returns, outperforming traditional asset classes over the last two years.
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