Investors would have increased their savings by 38.73% if they had bought Bitcoin once a month last year. DCA is a technique that allows averaging long-term investment and making profits if the value rises.
A well-known and easy technique to invest in Bitcoin (BTC) is DCA (dollar cost average). It consists of putting the same amount of money in the asset every year, semester, month, or week. Of course, that will depend on what investors prefer, as long as they maintain it for a scheduled period.
The DCA technique allows averaging long-term investment and increasing savings when the value rises. Those who invested the same amount in Bitcoin every month during the last year received a profit of 38.73%.
Those who invested little money and those allocating high volumes achieved that increase. In other words, regardless of how much people can save in BTC, they can make that profit if they keep the same investment every month.
The DCA Technique Adapts to the Personal Savings Margin
If a person had invested USD 25 in Bitcoin every month in the last year, he would have spent USD 300. Thanks to that, he would now have USD 416, which means 116 more US dollars. Of course, the same benefits apply to higher amounts of money.
Concerning higher savings, another person could have bought USD 125 worth of Bitcoin monthly during the last year. He would have spent USD 1,500 and would now have USD 2,080, a gain of USD 580.
Some people could have acquired up to USD 1,000 worth of BTC per month during that period. They would have spent USD 12,000 and would now have USD 16,647, a profit of USD 4,647.
There Is Less Risk of Losing by Buying Bitcoin Every Month
The price of Bitcoin has suffered a significant drop since the beginning of November. In other words, if it rises by early 2022, as analysts like Willy Woo have predicted, the profit would be higher.
In case the price of BTC continues to fall, the DCA technique allows averaging the investment of each month. The loss is low since not all purchases are at bearish prices. Investors adopting the DCA technique take that risk as they believe the cryptocurrency will appreciate in the long term.
Colombian trader Juan Rodríguez considers that short-term drops in the price of BTC are an opportunity to profit and buy cheaper. He attributes that to the belief that the value will eventually increase. In other words, it will always end up in profit. For that reason, he plans to continue investing in that way for five years.
Rodríguez, better known as Papa Bitcoin, is a renowned cryptocurrency analyst. He recently revealed how much he has invested in Bitcoin monthly to increase his savings by 154% in just over a year. Besides investing the same amount of money every month, he also takes advantage of price drops to buy more.
By Alexander Salazar