1312 sats \ 10 replies \ @ek 16 Nov 2023 \ parent \ on: deleted by author bitcoin
I agree
Statements like
makes whole good articles "taste bad" since they seem to not be written in good faith / very biased.
For me, DCA is a risk management strategy. It's not about max returns. It's about human psychology and spreading out your committment over time instead of taking a leap of faith and potentially getting burned and scared and selling at a huge loss because you've your life savings getting evaporated and want to cut your losses.
Trying to frame DCA as a "fiat mentality" seems to completely miss this point.
Indeed.
For example, if I'm a father of four, DCA-ing my wealth over 4 years might make more sense than lumpsum-ing for me to enter Bitcoin, even if I eventually want to end up all-in. Because I can't afford my net-worth to ever go below, say, 50% of what it is today, without putting my family's day to day material well-being on risk.
Just a random example. You could make another one the other way around showcasing how for someone else it makes all the sense to forget about DCA and just go balls in. I mean, I'm not the best example of caution and you know it :)
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I mean, I'm not the best example of caution and you know it :)
I know and I did a similar thing as you :)
Just don't know who started first, haha
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Holding/spreading fiat poses a higher risk than holding Bitcoin, especially if you live in countries with high inflation rates.
Good point. But I know that my monthly costs are "fixed" in EUR. Fixed in quotation marks because of inflation, as you mentioned.
But I would say I live in a country where the inflation is more predictable than the price of bitcoin.
So I'd rather play it safe and hold funds in EUR that I have to spend in EUR (@DarthCoin responding in 3, 2, 1... lol) anyway.
We might agree that DCA is a short-term risk management strategy?
Sure, I can go all in at the peak and be in a loss for two years, who cares?
You should care since you potentially can't eat or have a shelter for these 2 years if you really did go all in
Something lost in communication may be that one can be 99% in bitcoin but still DCA and hold emergency funds.
Is that not "basically" all in?
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big balls 🤣😂
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hopefully, a substantial amount of savings in fiat that can cover your expenses for several months in case of immediate emergencies.
Now, imagine your boss kindly sends you $10,000 as Bonus
Now we're suddenly talking about emergency funds and bonuses. Moving the goal posts?
I thought you meant literally all in, 100% bitcoin, 0% fiat at all times
Complete exposure to volatility
That's at least what I am arguing against and in favor of DCA.
My point with this "You Shouldn't DCA Bitcoin" is that instead of spreading out the conversion of those $10,000 over a year (buying small amounts regularly), i suggest converting the entire sum at once and avoiding the DCA approach altogether.
Okay, I see. I can agree somewhat with that.
I guess the best is a mixed strategy: lump sum first, then "DCA" (or however you want to call regular buys) and buy the dips
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My intention was not to suggest that individuals with a family of 10 should all their money into Bitcoin all at once leaving them without enough fiat for monthly expenses and emergencies. That's just crazy.
TL;DR — No DCA-ing, go all in on Bitcoin as soon as you can.
I hope you can see where this misunderstanding between us comes from.
Could quote more comments from you but currently not enough time. Maybe later or if you want more clarification.
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