One easy TradFi trick to work towards bitcoin riches

Yesterday speaking at the Future Investment Initiative Institute (FII Institute) Conference, President Trump said the following (slightly edited to make sense of his Trump ramblings[1]):

“I’ve signed executive orders to keep the United States at the forefront of artificial intelligence and to end Joe Biden’s war on bitcoin and crypto. We ended that war totally, that war is over.

“[Biden’s administration] were very hostile towards [bitcoin and crypto], until the very end because there’s so many people on bitcoin and crypto… so many people were being indicted for no reason whatsoever… many of those indictments were dropped before the election. Because [Biden’s administration] said wait a minute there’s 100 million, 125 million people using this and they didn’t want all these people [voting against them].

“We had that vote… and I see people that were being indicted and I say, “I saved your life”… They said, why is trump doing this, is he doing it for political reasons. I don’t do anything for political reasons, I do what’s right. I want to be at the forefront of every industry.”

While the price of bitcoin has been in a tight range for the last couple of months, you can’t deny that bitcoin and crypto is still very much on Trump’s agenda.

But why isn’t the price mooning? And does that mean it’s going to head lower?

With David Sacks pressing on with the Strategic Bitcoin Reserve, and Howard Lutnick pressing on with the Sovereign Wealth Fund, surely it’s only a matter of time before bitcoin rockets back through $100,000 and onwards to $1 million?

But then again, the market was expecting fireworks when the executive orders were signed. Bitcoin headed lower instead.

It’s so hard to know what direction bitcoin’s price is going to head next!

So how on earth are you supposed to know when to buy bitcoin?

The good news is that you don’t need to know.

All you need to do is use a handy little trick from traditional finance, over a long term horizon, and you might just be on track to bitcoin riches.

BTC DCA

Have you ever heard of the term “DCA” when it comes to money and wealth?

The acronym stands for dollar cost averaging.

It’s simple really.

Imagine you have a weekly allowance, say $100, and you decide to use it to buy some bitcoin.

But the price of the bitcoin goes up and down every week, often by a lot. So, instead of trying to guess the best week to buy (which is virtually impossible) you spend the same amount of that allowance on bitcoin every week, regardless of the price.

That means, when bitcoin is cheaper: your money buys more bitcoin.

But of course, when bitcoin is more expensive: your money buys less.

That might sound strange at first, after all why not just buy when bitcoin is cheaper? But answer me this, when do you ever know for certain bitcoin will be cheaper?

The point of these regular buys is that over time, you end up with an "average" price for your bitcoin that smooths out all the ups and downs.

This way, you're not worried about buying at a high price, and ruing your decision if bitcoin is 10% cheaper next month. This strategy also helps you to ride out the peaks and deep troughs this market often delivers.

The hardest battle in bitcoin is to avoid buying high and selling low. With DCA it helps remove that mistake because you’re in it long term, and it doesn’t matter if you’re buying high or low.

That’s what dollar cost averaging means: spending a set amount regularly, regardless of the price, to try to get a better average price over time.

And if you’re wondering just how beneficial this strategy can be, there’s a wonderful site that shows you called dcabtc.com where you can see for yourself.

Had you been doing this for the last nine years consistently, and regularly bought $100 of bitcoin every week since, you’d have invested $47,000, but your pot would be currently worth $893,366.

Even starting today, I think DCA is the right way to play this market.

With so much happening, so many events that can trigger an explosion higher, and also an explosion lower, dollar cost averaging, and stacking those sats is the best way to live in this market long term and still reap the rewards.

Trust in crypto,

Adam Atlantic

PS. You might be wondering exactly how you put a DCA strategy into play with bitcoin. And that’s a great question, so on Monday I’ll show you with what I consider to be the easiest way to DCA into bitcoin long term.

 [1] https://x.com/BitcoinMagazine/status/1892363976983359737