We Never See Nothing

Hey Redditors,

(initally posted in r/CryptoCurrency, but the bot removed due to lack of karma)

One thing have learned by being involved with the markets is that it is very very difficult to time the market. We could think of the scenarios where we would think that it we would buy the next dip and before you know, you end up losing money. On the other side, if you plan to invest a lump sump amount, you never know where are you positioned during the bull run – if you are buying the tops, one is doomed. Imagine this, buying Bitcoin at $16000 just before the crash of 2018.

Cryptocurrency markets are extremely volatile; everybody knows this. Before even having experience at the stock markets (I am quite young in mid 20s), my first foray into investing (call it speculative trading) was losing 90 % of $ 1000 invested during 2018. Whereas for stock markets, even if the index loses 1-2 % it is a really big deal. When I started to monitor stock markets, I was in shock.

I have planned (been doing it for 10 days) to invest 100 $ in Bitcoin every month for next 3 years irrespective of the the market movements. The investments would be divided over the number of days in a month and a purchase is triggered at 12 AM daily (2 * $100 * 12 months / 365 days = $6.57 / day).

Why am I doing it ?

1. You’ve heard about people who invest some fixed amount of dollars (systematic investment plan) and how their wealth has grown over years (3-5 years). What’s popular for equity markets (DCA), why isn’t it popular with cryptomarkets.
2. A lot of young people investing heavily in cryptocurrencies do not realise that investing is all about patience. Those who reap some early rewards, would never realise the power of compounding and accumulating wealth over the number of years. If a markets moves up rapidly, it is bound to come down rapidly. Investing entire amount in lumpsum is a gamble.
3. Deep inside, I would want it to grow to abnormal values, but even if it beats the CAGR of S&P 500 or NASDAQ and NYSE FANG+ index, I would be happy. Sometimes, beating the index is the hardest thing.
4. I am long on Bitcoin. I believe that it could be a digital gold and investing systematically over long period of time should essentially yield good returns.
5. Why 3 years ? It is May 2021. The next halving of miner reward, will during May 2024. It is an important event for Bitcoin lifecycle. During the next one year, I believe, it will go to around $ 100 thousant dollars and suffer a major correction post that. (basically, I am following Stock-to-Flow model).
6. Think about investing in Amazon consistently after dot com bubble. Thing about consistently investing in Gold during the 90s.

I will keep my guys updated about the progress on the sub-reddit and this point during the next few quarters. Let’s see how things shape up from here.

Thanks.