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📈 How to Maximize Your Bitcoin Stack

Author

Hector Alvero
August 27, 2024

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Featured Article

If you’re a Bitcoiner, you’ve probably asked yourself, “How can I own more Bitcoin?” With various accumulation strategies out there, it can be challenging to determine the best approach to stack more sats.

What is Dollar-Cost Averaging?

Dollar-cost averaging involves investing a fixed amount of money in bitcoin at regular intervals. This method spreads investment over time, generally reducing the impact of market volatility.

The regular intervals of a DCA strategy can range from monthly purchases to much smaller time intervals such as daily or hourly.  

Here’s how a DCA strategy might work: Investor A decides to purchase $200 of bitcoin every month. Over five months, regardless of price variations, the investor converts $200 into bitcoin monthly for a total of $1,000.

If the Bitcoin price is higher in any given month, the investor is happy about their earlier purchases. If the Bitcoin price is lower, the investor is satisfied in knowing he/she will be getting a better deal this month than the previous.

Pros and Cons of DCA

Pros of DCA:

  • Mitigates Risk: Reduces exposure to market fluctuations.

  • Emotional Stability: Encourages investors to avoid impulsive decisions.

  • Simplicity: Easy for beginners to implement.

Con of DCA:

  • Opportunity Cost: Potentially lower returns if bitcoin’s prices surge.

Want to investigate more Bitcoin accumulation strategies? Read the full post here to find out more.

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