In 10 out of 10 Years, Value Average Investing Gave a Higher Return than Dollar Cost Averaging on Bitcoin
A small change to the Dollar Cost Average strategy increased Bitcoin's return by 20% over the last decade.
Dear Crypto Asset Investors,
Everyone talks about Dollar-Cost Average (DCA) but no one ever talks about Value Averaging (VA). The next edition of the Crypto Research Newsletter coming out tomorrow, Thursday March 5th, discusses how VA beat DCA for the past 10 years in the Bitcoin market.
If you want to invest in Bitcoin and other cryptocurrencies, you have to decide if you want to dump all of your money into Bitcoin at once or spread out your investment over a certain period of time, normally a year.
People tell you to do the latter and spread out your investment over a period of time. The famous Crypto YouTube personality Ivan on Tech tells his listeners to Dollar-Cost Average in almost every episode.
But does Dollar-Cost Averaging really work with Bitcoin? The answer is that DCA works, but Value Averaging works even better as the backtest shows. In our research, Value Averaging beat Dollar Cost Averaging every year of Bitcoin’s existence.
In our weekly report, we compare Buy and Hold, Dollar-Cost Averaging, and a little known strategy that only seasoned stock traders use, called Value Averaging. We also provide the dataset for any analysts that would like to play with the raw data.
Sign up now to make sure you receive tomorrow’s report on how a simple change to the Dollar-Cost Average strategy generated a 20% difference in return on Bitcoin over the last ten years.