If You Used This Strategy, You Would Have Been Green On Bitcoin Regardless of Purchase Price

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Bitcoin is currently benefiting from safe-haven flows as the world appears dangerously perched on the precipice of another world war amid the ongoing hostilities between Israel and Hamas that can unleash a pan-regional conflagration. As the world’s premier cryptocurrency hovers comfortably north of the $30,000 price level, the Dollar-Cost Averaging (DCA) strategy is finally having its much-deserved moment in the proverbial limelight.

For the benefit of those who might not be aware, DCA involves investing the same amount of money in a specific security at regular intervals without any consideration for price. The idea here is that you would gain greater exposure to a particular investment conviction as its price declines.

Bitcoin’s current price of around $30,000 has emerged as a particularly strong endorsement of the DCA strategy. As illustrated in the above tweet, at current prices, the DCA will render any investment in Bitcoin profitable regardless of the purchase price.

What’s more, over the past two years, Dollar-Cost Averaging has yielded a 16 percent gain for Bitcoin versus just 8 percent for gold and a mere 1 percent for the S&P 500 index.

We noted in a post last week that a confluence of favorable tailwinds has played an important role in propelling Bitcoin north of the psychologically important $30,000 price level. These tailwinds include the Federal Reserve’s ongoing interest rate hiking pause and the ever-shortening odds when it comes to the launch of some of the first spot Bitcoin ETFs in the US.

There are copious reasons to believe that the SEC will relent and approve at least one spot Bitcoin ETF before the end of October. For one, SEC Commissioner Hester Pierce recently admitted that the “logic for why we haven’t approved a spot Bitcoin ETF has always mystified me.” Many analysts are interpreting this comment as the necessary groundwork for reversing the SEC’s heretofore hostility toward the crypto sector. Moreover, the investment titan BlackRock, whose spot Bitcoin ETF application with the SEC currently stands the best chance of getting expedited approval, has now obtained the CUSIP ahead of the launch of a new ETF.Β 

As per an analysis by K33 Research, the launch of spot Bitcoin ETFs could attract around 100,000 BTC in fresh investments within months, corresponding to around $3 billion in new investment, as per the current prices.

And, of course, the People’s Bank of China (PBOC) is currently injecting liquidity, which is apparently playing a role in supporting the price of Bitcoin.

It remains to be seen, however, whether this is the start of the much-anticipated pre-halving rally in Bitcoin or simply an aberrant pump-and-dump.

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