- Long-term Bitcoin investment would help investors make more profit
- DCA would work most for long-term investors
Warren Buffet, renowned serial investor and one of the richest men in the world, uses one of the most effective investment strategy plans in the world. He, oftentimes, have used the dollar-cost average strategy while investing in major stock market indices.
This strategy has been proven to work when implemented effectively.
The dollar-cost average, also referred to as DCA, is an investment plan that involves an investor dividing the sum of what he wants to invest in an asset by periodically investing in the asset or business.
This strategy has the advantage of allowing investors to gain regardless of when the asset performs well or badly. The strategy effectively reduces the negative effect that tends to come with price volatility.
Buffet has always shown his preference for implementing the dollar-cost averaging in the stock market indices. To be more specific, he prefers the S&P 500 index funds and dollar-cost averaging into the index.
However, history has shown that this same strategy can work with Bitcoin. In the last decade, BTC has recorded a 100% gain in five of those years. Presently too, over 90% of Bitcoin addresses are at a profit.
Cost-Dollar Averaging works with Bitcoin
History has shown that Bitcoin investments that are in the long term have always worked regardless of price volatility.
An example is an investor who probably has invested $100 in Bitcoin since 2014, as of today, he would have recorded a gain of over 1000%. This would happen regardless of the price volatility or the ups and down BTC faces.
DCA works with BTC because it tends to have corrective phases. During this phase, especially when the fundamentals and infrastructure improve, BTC tends to record a profit. When there is also an institutional demand for Bitcoin, its value tends to rise rapidly.