Bitcoin Dollar Cost Averaging @BTCDCA

Disclaimer : I am not a financial advisor. This article is for informational purposes only, and should not be considered financial advice. Decisions based on the information in this article are the sole responsibility of the reader.

Would you believe me if I told you that there’s an investment strategy that a 6-year-old could understand, will take you 10 minutes of work per year, outperform 90% of finance professionals in the long run, and make you a multi-millionaire over time?

Dollar Cost Averaging (DCA) is the discipline of buying a fixed dollar amount of a security or fund on a regular schedule regardless of share price or market direction.

For the past 10 years of my professional career, I have invested in 3 low expense ratio index funds using DCA. This PDF outlining the DCA strategy changed my life forever:

Although, I have been pleased with my more traditional investment plan and will continue to DCA according to the plan in the PDF above, I was introduced to Bitcoin (BTC) in May of 2017.

Satoshi Nakamoto invented Bitcoin in 2009,

Bitcoin is the world’s first working digital cash. Some say this is black market electronic money. Others say bitcoin is pieces of digital gold flying inside an unstoppable PayPal.

Regardless of your definition, Bitcoin is undeniably a monetary policy and social network based upon peers who value savings and not debt. Its value proposition is based upon its scarcity, immutability, and fungibility. At the same time, Bitcoin is censorship resistant, permission less, borderless, portable, leaderless, and decentralized.

Bitcoin is the hardest money ever invented: growth in its value cannot possibly increase its supply; it can only make the network more secure and immune to attack.

While there were many attempts at a digital cash, e-gold, or e-cash before Bitcoin, all failed due to the attack vector of centralization. This fact made those prior attempts at digital cash vulnerable to regulators.

An often-overlooked feature of Bitcoin, but arguably its most important quality is that it cannot be confiscated as long as you hold the private keys.

There are multiple ways one can secure their private keys, however the Trezor is the best in my opinion.

While many have argued endlessly regarding the reasons why Satoshi Nakamoto created Bitcoin, it is undeniable that this was a significant invention for the world of finance.

Many believe Satoshi Nakamoto was inspired to create Bitcoin as the holy grail for Austrian economists:

Regardless of your opinion of different economic models, a review of the world debt clocks leads one to the conclusion that the current central banking practices are unsustainable.

Buying a fixed dollar amount of Bitcoin both on a regular schedule and within one’s budget, regardless of share price or market direction, will make far more successful investors in this volatile but disruptive asset class.

Many sold the vast majority of their Bitcoin after massive pumps in the price only to regret their decision when they consulted with their accountant or years later when Bitcoin reached ATHs.

On the other hand, others purchased Bitcoin in amounts well beyond their budget and at the top of the hype cycle. This short-term thinking leads to capitulation and massive losses.

DCA will smooth out the volatility and allow you to capture all of the dips, while still maintaining a balance to enjoy the massive gains. This assumes you have a low time preference and can HODL for a significant amount of time.

Buying $100 USD of Bitcoin each week with the cash app and transferring your BTC to a Trezor hardware wallet takes only seconds. Could you find $100 each week that may change your entire life in 10 years?

What is the potential upside of DCA for Bitcoin?

Had I started investing $100 USD into Bitcoin per week over the same time frame as my low-cost index fund investments, I would have made $250 million USD from a $46,000 investment. More importantly I would now have over 29,000 Bitcoin.

“The most powerful force in the universe is compound interest” -Albert Einstein

Track your Bitcoin DCA performance with this calculator:

Wealth gained hastily will dwindle, but whoever gathers little by little will increase it~Proverbs 13:11

While past performance is no guarantee of future returns, consider the fact that Bitcoin is so scarce that not even every millionaire can own their own Bitcoin.

Satoshi programmed Bitcoin so that there can only be 21 million Bitcoin. However, over 4 million Bitcoin have been lost, destroyed, or the private keys are missing. This leaves only approximately 17 million Bitcoin that will ever be available in the future. In addition, many millionaires have already purchased more than an entire Bitcoin and have no intention to sell until well into the future. .

As other sovereign individuals, cypherpunks, libertarians, investors, and high net worth individuals determine that they want to take the red pill, the price will be determined by pure supply and demand Austrian economics.

Where do you see yourself in 10 years?

For all of the above reasons, it is my opinion that Bitcoin is the Apex predator of money. It offers an asymmetrical investment opportunity that will likely outperform my current traditional investment portfolio using a significantly smaller capital investment.

In conclusion, volatility and time are your weapons with Bitcoin Dollar Cost Averaging. Feel free to contact me via twitter. All feedback is welcome.

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This material is not financial advice. The author owns Bitcoin and Vanguard index funds. This article is my opinion only. I am not paid by any of the products listed above.