What will the result be if you take off part of your salary on payday every month and buy bitcoin at the market price on that day? 바이낸스 거래소 사이트 It’s kind of like a deposit. The difference is that you don’t just accumulate part of your salary, but you buy bitcoin at the price range at the time, so the price of bitcoin can go up or down.
Today, let’s take a look at the results of this strategy.
What is DCA? What are the results of 10 years of DCA?
If you’re investing in virtual currency or stocks, you may have heard of the term “DCA.” DCA is short for Dollar Cost Averaging, which means continuing to water your rating to your advantage.
As we saw in the case, if you continue to buy Bitcoin as part of your monthly payday salary, this is also DCA. It is a strategy to lower the average purchase price by purchasing certain assets regularly.
There is a survey released by the research center of the virtual asset exchange Covit in April. We set up four groups and each group paid $12,000 each, and we simulated the results.
The survey period is about 10 years from 2012 to 2021, and the return is based on the assumption that $100 per month, $1200 per year, $1200 per year, and $12,000 per 10 years, respectively, are invested in different strategies.
Group 1 is the group that bought $1200 worth of bitcoin when bitcoin prices were the lowest that year. It is not known exactly when it is the lowest point of the year, so it was judged by the standards of the general public as much as possible.
Group 2 is a group that purchased $100 of Bitcoin on the 1st of every month regardless of the price of Bitcoin.
Group 3 is the group that bought Bitcoin when the Google Trend Index, which informs investors’ interest in Bitcoin, was the highest that year, that is, when investors were most interested in Bitcoin.
Group 4 is a group that just accumulates $100 a month from 2012 to 2021.
The results showed that Group 1 had the highest return. But you don’t know when bitcoin prices are the lowest in the year, so this is literally just an ideal outcome.
Among the remaining three groups, the group that carried out the DCA strategy of purchasing $100 of Bitcoin on the 1st of every month, regardless of the price of Bitcoin, had the highest return.
In this way, the Bitcoin DCA strategy seems to be a very good strategy.
But this is the result of tracking a long period of 10 years. It’s easy to understand, considering that the bitcoin price was less than a dollar a decade ago. In short, this is a good result because the unit price was very low 10 years ago.
So what would have been the result of buying bitcoin from a more recent point in time?
What would have been the result of DCA for four, five, six years?
According to Twitter venturefounder, the average unit price is as follows if you bought Bitcoin regularly every month through the DCA strategy for a relatively short period of 4, 5, and 6 years. For your information, the current bitcoin market price is $20,230.
If you bought Bitcoin on a certain day every month for four years from August 2018, the current average unit price is $2,2391. Surprisingly, it’s much higher than Bitcoin’s current price of $20,230. It means you’re losing a lot of money.
If you bought a certain amount of Bitcoin on a certain day every month for five years from August 2017, the current average unit price is 19585. Compared to the current Bitcoin price, it’s only about $800. That’s about 3%.
If you bought a certain amount of Bitcoin on a certain day every month for six years from August 2016, the current average unit price is $16563. Compared to the current Bitcoin price, the estimate is about $3,700. It would have been able to make about 18 percent of the profit.
So, if you want to make a profit from the strategy of steadily buying Bitcoin every month, you have to collect it for at least five years to make a profit.
This means that if you buy bitcoin from now on, you can’t expect a return until at least August 2027.
Of course, there is no guarantee that past figures will be applied correctly in the future, but I think it’s an interesting experiment.
For those who invest in Bitcoin for a long time, I think they should think of it as a long breath of more than 5 years, not 1-2 years.