Is DCA the Way? Diligent Bitcoin Buyers Declared Back in the Black

If you’ve consistently stacked Bitcoin through daily recurring buys until today, congratulations! Your investment has officially turned a profit, according to a new analysis. 

A tweet by Bitcoiner @w_s_bitcoin (also known as “Wicked”) on Monday highlighted a "weighted average cost of purchased Bitcoin" chart that shows that investors who continue to "dollar cost average" (DCA) into the largest crypto asset can now call their strategy a success, no matter when they started to invest. 

DCA is a strategy where investors put a fixed amount of money into a stock or cryptocurrency at regular time intervals, irrespective of the changes in the asset’s price. The practice is meant to reduce the stress and complexity involved with timing a notoriously volatile market, and is often encouraged by prominent Bitcoiners as a wiser alternative to active trading. 

According to the chart, the weighted average cost of purchased Bitcoin stood at $31,233 as of July 3—its highest price since June 2022.

“When the entire orange line goes below the dotted white line, that’s when ALL daily DCA’ers are in profit,” explained Wicked.

This doesn’t mean that all Bitcoin holders are in the green, and certainly not those who bought at $69,000 in November 2021 and did nothing afterward. However, those who continued making recurring buys from that point until now have made up for their losses by also buying during the lows, Wicked said, such as when Bitcoin collapsed below $16,000 after FTX went under.

“Regular stacking is profitable for everyone even when Bitcoin is down 55% from the top,” tweeted Bitcoin Standard author Saifedean Ammous on Monday.  “An astonishing testament to Bitcoin's power as a saving technology.”

Wicked's conclusion is contested, however. According to crypto market intelligence platform CryptoQuant, those who began daily DCA buys during the last bull market are still underwater, assuming a current Bitcoin price of  $31,400.

"So those who started DCA in mid June 2020 to Sep 2021 are not in profit," wrote Hochan Chung, CryptoQuant's Head of Marketing, to Decrypt via DM. Their weighted average cost per coin "ranges from 31.4k to 35.3K," he explained.

Bitcoin is up 85.4% year to date, bolstered by diminishing confidence in the banking system in March, and rising confidence in the likelihood of a Bitcoin spot ETF being approved in the United States since BlackRock’s filing in June.

The asset’s gains have also put MicroStrategy back into the profit zone. The company is one of the largest corporate holders of Bitcoin, owning 152,333 BTC in total, collectively acquired through a series of recurring buys since August 2020. The company’s Executive Chairman Michael Saylor is known for advising his followers to never sell their Bitcoin.

Editor's note: this article has been updated to add comments from CryptoQuant.