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Two-year Bitcoin DCA experiment demonstrates profit despite volatility Two-year Bitcoin DCA experiment demonstrates profit despite volatility

Two-year Bitcoin DCA experiment demonstrates profit despite volatility

Data via Glassnode

By utilizing the dollar-cost averaging strategy, a modest daily investment of $5 into Bitcoin could have yielded a profit of over $1,500 over two years.

Quick Take

The potency of dollar-cost averaging (DCA) in Bitcoin investment is underscored by data from the past two years. In November 2021, when Bitcoin (BTC) reached a notable high of approximately $67,589, investors could have initiated a daily investment strategy. By investing a modest $5 per day from November 2021 to November 2023, the accumulated investment would total $3,730.

Fast-forward to the present, and the value of that consistent Bitcoin investment, calculated in current prices, has grown to an estimated $5,279.19. This implies a profit of $1,549.19, a testament to the power of DCA strategy. This approach allows investors to spread risks over time, taking advantage of Bitcoin’s price fluctuations.

The green line, rising steadily over time, would represent the cumulative investment in USD, showing the consistency of the $5 daily input. In contrast, the orange line, indicative of the cumulative value of Bitcoin purchased, would sway to reflect Bitcoin’s price changes.

BTC Dollar Cost Averaging: (Source: Glassnode)
BTC Dollar Cost Averaging: (Source: Glassnode)

Disclosure: The above is a hypothetical experiment based on historical data and is not investment advice.