Dollar Cost Averaging into Bitcoin as a Winning Strategy; 2019 Stats Show 49% ROI for Weekly Investments
The winning Bitcoin trading strategy is yet to be learnt even by the industry veterans given the volatile nature of digital currencies.
However, a statistical analysis based on 2019 prices shows that a weekly investment on BTC would have yielded around 50% ROI as of press date.
Many investors have a habit of buying large at a time they suspect the market is at a low or are scared of being left out during a bull run. This has proven to be both successful and futile in several occasions with investors losing a large chunk of their portfolio in just hours.
Instead of risking, they could simply average their Bitcoin purchases over a long period to beat the BTC index.
Crypto Enthusiast, Anthony Pompliano, posted a detailed analysis on twitter for the ROI positions an investor would be in assuming they made consistent weekly BTC purchases from 2017. The crypto influencer noted that and $10 weekly investment throughout 2019 is currently at 49% ROI.
0/ If you bought $10 of Bitcoin each week for the last year, you would be up 49% currently. pic.twitter.com/EJAzSlmdj6
— Pomp 🌪 (@APompliano) November 25, 2019
This figure however reduced to 27% when the analysis includes 2018 but shoots back up to 156% for an investor who has implemented this strategy since 2017.
Based on these statistics, it is clear that Bitcoin has been gaining from a long-term perspective. It therefore follows that investors might be better off looking at the bigger picture as opposed to small shocks over the past three years.
In addition, investment averaging seems to have a better payoff compared to active speculation based on seasonal news like the May 2020 Bitcoin halving.