DOLLAR COST AVERAGING Bitcoin – Carlos Lontro
Hi everyone,
I have kept this blog more related with my forex journey and the evolution of myself regards what I learned from my past mistakes, as well as my change in mindset. The biggest change happened after reading Rich Dad, Poor Dad and I recommend it to everyone. The rules are simple, one must first earn and then save to invest. Money spend is money that wont work for you in the future. Learn about finding what is your financial freedom amount and here I will drop one of my very early post, written in January 2017. https://medium.com/@ESIRInvestors/2017-01-03-the-4-rule-450ddd4f9866#.28zrlj7vz
The 4% rule opened my eyes to the importance of having a real plan. How can I be financially free if I dont have a clear figure and a plan to achieve it.
Since then I also diversified into Crypto and done several mistakes and I learned a lot more. Bitcoin is King and no need to complicate things and expose to risky projects. Stick to what you understand and Bitcoin is safe and secure, all others..not so much, so why even bother. I try to get as many friends on board and also share my ideas to other communities and here is something I have worked on to show how simple and effective the most safest strategy plays out on the long run, Dollar Cost Averaging.
On this example I consider one monthly investment every month at th end of the month with 200$. We started in march 2017 until today. Since then bitcoin hit a price range from 1.000$ to 20.000$ and back to 3.500$. The amount of bitcoins bought every month changes according to it’s price. A lower price gets you more bitcoins and a higher price less. But over time you average your buy price and start accumulating bitcoins. Check the table below.
We are not yet at the end of January but lets suppose bitcoin closes at 8900$ and with our 200$ investment we will buy 0.0047btc, with a total of 1.50899btc since the start. This will be worth 13.430$ and we have invested so far a total of 7.000$. Bitcoin is the safest crypto and the one with the longest trackrecord and has strong fundamentals and is now increasing volume and adoption to a wider public. There is no point to dollar cost average something you dont understand or is not a safe and strong investment. If bitcoin revisits its all time highs tomorrow we would be holding 29.600$ and if it goes to its expected next parabolic Gartner cycle around an estimated 55.000$, our 1.5btc would be worth near 83.000$. If this happens only in the next 1–2 years remember every month we are increasing our holdings further. Might do an update in the next 6 months after the bitcoin halving to reanalyze results. Nowadays we can be a liquidity provider with decentralized finances and earn around 8% yield per year without any exposure and full withdrawal liquidity available. 83.000$ x 8% =6.640$, now this in many countries is more than enough to put food on the table and pay some basic bills all year long. To reduce risk you can now fix this amount and just reinvest profits while you keep saving and investing and restart Dollar Cost Averaging. I obviously diversify into Forex and other Cryptos I follow on a daily basis over the past 1–2years, remember only invest in what you understand or have an experienced trader/manager doing it, but diversify your risk, dont place all eggs in one basket. Research a bit about Rich Dad, Poor Dad, some youtube videos sum it up nicely. Check about the 4% rule, improve your budgeting, focus on your own finances first. The early bigger returns are made by working a job or running a business. Then save and invest with a plan and goals.
Wish you all amazing returns.
Published at Tue, 28 Jan 2020 23:05:21 +0000
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