Should You Dollar Cost Average DCA or Go All In?

00:02 And with the price of Bitcoin above two
00:04 uh $106,000
00:06 per coin, you’re probably wondering,
00:08 “Okay, I should have bought more
00:09 Bitcoin.” Well, of course, you should
00:11 have bought more Bitcoin. We should all
00:13 have always bought more Bitcoin. Uh so,
00:15 don’t feel bad. Totally normal. Um but
00:17 you’re probably thinking, “Okay, I’m
00:18 ready to buy now. What do I do?” Like,
00:20 you know, do I go all in? Do I dollar
00:23 cost average? And so, this video is
00:25 intended to talk about that. So, my
00:28 default option is whatever amount of
00:30 money you’re planning to invest in
00:32 Bitcoin, just put it in. Just like go on
00:35 Coinbase, ignore the price, and just buy
00:38 as much Bitcoin as you can with whatever
00:40 financial resources are available to
00:42 you. And then, if you get more financial
00:44 resources that become available to you,
00:46 buy more Bitcoin at whatever the price
00:48 happens to be. If the price dips and you
00:51 decide you’re willing to put more into
00:54 Bitcoin because the price is lower,
00:56 great. buy more Bitcoin, but don’t don’t
00:58 wait for a dip because if you wait if
01:00 you try to wait for a dip, it’ll never
01:02 come.
01:04 You know, there’s still people when I
01:05 posted that, you know, everybody ought
01:07 to be buying at 88,000. There are still
01:09 people who said, “I’m buying at 85,000.”
01:11 Well, 85,000 never came. Like, we
01:14 haven’t seen 85,000 since we were at
01:16 88,000. And so, you know, 20,000 of
01:19 upside has gone by um you know, since
01:23 then. And in in exchange for not getting
01:26 a a 3.4% dip from 88 to 85, now we’re,
01:31 you know, $18,000 to the good. And
01:34 anybody who didn’t buy missed out on
01:36 that. So, do not wait for a dip. But if
01:38 one does happen and you decide that
01:40 you’re willing to up your exposure to
01:42 Bitcoin, great. Do that. Okay.
01:47 So, let’s talk about why I I prefer
01:50 all-in versus dollar cost averaging.
01:53 one, it’s worked well for me. Like if if
01:55 I start deciding how I’m going to invest
01:58 in something and I have to decide on
02:01 dollar cost averaging, I tend to get
02:02 decision paralysis. In fact, everybody
02:04 gets decision paralysis because if
02:06 you’re not going to go if you’re not
02:08 just going to put whatever money in
02:10 you’re planning to put in, now you have
02:11 a decision to make, which is how much do
02:14 you put in of what you’re planning to
02:16 put in? Do you put in a little bit every
02:18 week? If so, for how long? Do you do
02:21 that for 3 months, 6 months, 12 months,
02:23 3 years? And what do you do with the
02:26 money that you’re not putting in
02:27 Bitcoin? Do you leave it sitting in US
02:29 dollar cash, which is melting like an
02:31 ice cube? Do you put it in a uh
02:33 certificate of deposit that gets 4%
02:36 interest? You just There’s all these
02:38 decisions that mess you up. If you’re
02:40 not just going to go buy Bitcoin, if you
02:43 just go buy Bitcoin with whatever
02:45 financial resources you have available,
02:48 then it’s done. You hit buy and you’re
02:49 done. like you don’t have to think about
02:50 it anymore. You don’t have to decide,
02:53 you know, are you going to put some in?
02:54 Are you going to put a quarter in? Are
02:56 you going to put a half in, three/4ers
02:58 in, two/3 in, one/ird in, and then are
03:01 you going to dollar cost the rest of it
03:02 in? You just all of those problems go
03:05 away when you just buy Bitcoin with
03:07 whatever financial resources you have.
03:09 Then you don’t have to worry about all
03:11 those complicated questions. Um so also
03:14 historically just buying Bitcoin has
03:17 resulted in better returns than dollar
03:20 cost averaging. Now there is an
03:21 exception to that. In a bare market
03:24 which is a down market, a pessimistic
03:26 market which is called a bare market. In
03:28 a bare market, dollar cost averaging
03:31 tends to outperform going allin but only
03:35 for small periods of time when the price
03:37 is consistently dropping. We are not in
03:40 one of those times when the price is
03:41 consistently dropping. We are in one of
03:43 those times where the price is
03:44 consistently going up. Uh therefore, I’m
03:47 not recommending dollar cost averaging.
03:49 Uh because dollar cost averaging is
03:51 typically what you do when things are
03:53 doing the opposite of what they’re doing
03:55 right now. So that’s why I’m saying
03:57 whatever you can afford to buy, just buy
03:59 it. Like buy it and be done with it.
04:01 Okay. So if you decide, let’s talk about
04:03 what dollar cost averaging is just in
04:06 case you know that’s something you want
04:07 to understand. So dollar cost averaging
04:09 is deciding that you’re going to buy the
04:11 same US dollar amount of something every
04:15 single week. Typically it’s weekly. It
04:17 can be daily. It could be monthly, but
04:18 almost everybody does it weekly. So you
04:20 decide, okay, I’m going to spend I’m
04:22 going to buy a $100 of Bitcoin every
04:24 single week. And you can actually set
04:26 that up on Coinbase in a recurring buy.
04:28 So every single week, it’ll
04:29 automatically draft $100 from your bank
04:31 account and buy Bitcoin with it
04:33 automatically. And I think on automatic
04:36 buys, they don’t have fees. I’m not sure
04:38 about that. I know some of the different
04:40 providers have no fees on automatic uh
04:43 uh d uh automatic uh buys. Recurring
04:46 buys. They’re called recurring buys, but
04:48 I can’t remember. I think Coinbase has
04:50 no fees on recurring buys, but anyway.
04:51 So, you buy the same amount every single
04:53 week, and you just do that. You just let
04:55 it run. Um and you let it go run until
04:58 you can’t afford to do it anymore or
05:00 whatever. So, generally that’s a good
05:03 strategy for a lot of assets like the
05:05 stock market, the S&P 500 because they
05:08 tend to go up and down and it sort of,
05:10 you know, lets you buy a little bit
05:12 more. You know, $100 gets you a little
05:14 bit more of it when it’s down and it
05:15 gets you a little bit less of it when
05:17 it’s up and it sort of evens out over
05:18 time and it it keeps you from feeling
05:20 bad that you bought at the wrong time.
05:22 Um, but Bitcoin is so aggressive in its
05:25 price moves that it’s way easier with
05:28 Bitcoin to miss out on the upside. So,
05:29 for example, with dollar cost averaging
05:31 in the stock market in general, you
05:34 could you could buy at the wrong time
05:36 and your money, you’re not in the money
05:38 in the stock market for three, four,
05:40 five years, six or seven years
05:42 sometimes. So, dollar cost averaging
05:44 makes sure you’re not in that position.
05:46 Uh, with Bitcoin, you’re virtually
05:48 guaranteed to be up within, and I think
05:50 the probability I I posted this
05:52 previously, but I think it’s like 97% of
05:54 the time you’re up within three years,
05:56 and 100% of the time you’re up within
05:58 four years with Bitcoin. So, um, and 67%
06:01 of the time you’re up within 2 years.
06:03 And right now, I think the probability
06:05 is much, uh, you know, much better than
06:07 that because we’re not in a bare market.
06:08 We’re in a bull market, which means an
06:11 up market, which means a positive, you
06:13 know, everything’s moving in the right
06:14 direction. But for people who dollar
06:16 cost average, they just buy the same
06:17 amount. Some sometimes it’s $100,
06:19 sometimes a thousand. I’ve known people
06:21 who are dollar cost averaging 10,000 a
06:23 week. Um, okay. If you have the
06:25 financial resources to do that, great.
06:28 But you tend to underperform. People who
06:30 are just buying and holding, you tend to
06:32 underperform by doing that. The other
06:34 reason, again, going back to what I said
06:36 initially, the reason I don’t like
06:38 dollar cost averaging is that it forces
06:41 you to make a bunch of decisions that
06:42 tend to leave you in decision paralysis.
06:45 Like how much a week and how long am I
06:48 going to leave it going? So, you got to
06:50 decide how much. You got to decide how
06:52 long you’re going to keep it going. You
06:53 got to decide am I doing this weekly,
06:55 monthly, am I doing it daily, like how
06:57 often? Uh and you have to decide what is
06:60 your initial position, which means what
07:01 percent of your money you’re going to
07:03 put in up front before you start dollar
07:05 cost averaging. And there’s like a few
07:07 more. So in total there’s four there’s
07:09 somewhere between four and seven little
07:12 decisions you have to make before you
07:14 can dollar cost average because it’s how
07:17 much and how much initially versus
07:19 dollar cost average and how much you
07:20 know for what period of time and what
07:23 interval and you know there’s a few
07:25 other things as well and what are you
07:27 going to do with the money when it’s not
07:28 in Bitcoin while it’s waiting to become
07:30 Bitcoin. there’s just like seven
07:32 different decisions you got to make
07:33 that’s going to result in you just not
07:35 pulling the trigger and not buying the
07:36 Bitcoin which is what happens to people
07:38 all the time. So, um that that you know
07:41 the main way people invest are just
07:43 taking the money and putting it in. It’s
07:45 called allin. Although nobody’s
07:47 advocating you put 100% of your
07:48 financial resources in Bitcoin. Uh even
07:51 I’m at like well it was like 97%. It’s
07:53 probably getting close to like 98% now
07:55 but it’s like let’s call it 97%. Even
07:57 I’m at 97% of my liquid assets. Uh which
08:00 is not 100%. Uh although 97% is pretty
08:03 close. Um so uh you can dollar cost
08:06 average or you can do allin which means
08:08 all in whatever money you have decided
08:10 that you are going to buy a bitcoin. You
08:12 just go ahead and buy it now which is
08:15 what I recommend. Or, you know, you can
08:17 do half and half, which is you take half
08:19 of the money that you want to put in
08:20 Bitcoin and you put it in right now and
08:23 the other half you figure out these
08:25 complicated multi-art, you know,
08:27 decisions to decide how to dollar cost
08:29 the other uh other half of it. The
08:31 fourth thing you can do if you’re not
08:33 doing allin or dollar cost averaging or
08:36 half of each is you can come up you can
08:39 use a method that I I don’t I think I
08:41 came up with it myself, but I probably
08:44 didn’t. I probably I’ve read so many
08:45 books I probably got it from some book
08:46 somewhere. But if I did, I can’t
08:47 remember. I think I think I came up with
08:50 this myself, but it’s probably also in a
08:52 thousand different investment books that
08:54 I haven’t read or maybe some I did read
08:56 that I forgot. Give me one second.
09:05 And that is that you can invest the
09:08 amount of money where psychologically
09:11 half of you wishes it would go up
09:14 because you have enough money in that
09:16 you would enjoy the upside, but the
09:17 other half of you wishes your investment
09:19 would go down so that you can buy more.
09:22 It basically guarantees that you never
09:24 really lose because if it goes up, well,
09:26 it’s up and if it goes down, you buy
09:28 more. But in some ways it also
09:30 guarantees you never really win because
09:33 if it goes up you wish you had uh you
09:36 know you wish I had bought more before
09:38 it went up. And if it goes down you’re
09:40 thinking dang if I had just waited a
09:42 little while I could have bought my
09:45 money at the lower price. But uh it’s a
09:47 it’s a great way to dip your toe in the
09:49 water. And it gets over the decision
09:50 paralysis of somebody trying to decide
09:52 you know when to buy and how much to buy
09:54 and all that sort of stuff. It’s like
09:55 great let’s just make it easy. What
09:58 amount of money do you want in Bitcoin
10:00 where half of you would wish it goes up
10:02 and the other half of you would wish it
10:04 goes down? So if you put that amount of
10:07 money in Bitcoin, in some ways you can’t
10:09 lose because if it goes up you’re happy
10:11 because your money’s going up and if it
10:13 goes down well you’re also happy because
10:15 you think wow I could buy more and
10:17 that’s what I wanted to do anyway. So,
10:19 sort of guaranteed you don’t fully win,
10:20 but also guarantees you don’t fully
10:22 lose. And it’s a good way of
10:23 psychologically getting over the hurdle
10:25 of how much do I invest? And you know,
10:27 the decision paralysis is like great,
10:29 just invest however much makes you part
10:32 of you wish it goes up and part of you
10:34 wish it goes down in price. Then you
10:36 won’t really be disappointed either way.
10:38 But anyway, regardless, I think now is a
10:40 fantastic time to invest in Bitcoin. At
10:43 some point if Bitcoin’s continually
10:45 grinding down for what appear appears to
10:48 be a solid, you know, trajectory, I will
10:51 probably start recommending people
10:52 dollar cost average.
10:55 I don’t think that’s going to happen in
10:57 the next 6 months. Probably not in the
10:58 next 12 months and maybe never. So, you
11:01 know, for now it seems if you know any
11:04 extra money I have every time a paycheck
11:06 hits every two weeks, boom, straight in
11:08 Bitcoin. No questions asked. It just
11:10 straight in Bitcoin. I mean, I don’t
11:12 think about it. I don’t care what the
11:13 price is. It just goes any financial
11:15 resource that I can get my hands on or
11:17 that’s free up or I realize I’m not
11:18 going to need for something. Boom.
11:21 Straight in Bitcoin. No matter the
11:23 price, boom, straight in Bitcoin. And
11:25 then obviously move to uh self-custody
11:27 in Bitkey for anything other than just,
11:30 you know, the day-to-day balance I need
11:31 to keep in Coinbase just to make sure my
11:33 debit card always works. So everything
11:35 else I keep in supercure cold storage.
11:38 Again, I recommend bit key.orld world is
11:41 their website bitke.w
11:44 WLD
11:45 and uh anyway, great time to buy a
11:47 Bitcoin and for all of you who bought
11:49 Bitcoin in the past, it’s been a super
11:51 fun especially last six weeks. So
11:53 anyway, and I think we just have a long
11:55 long long way to go before uh you know,
11:58 Bitcoin’s going to 500,000 or a million
11:60 a coin. Easy. Easy. That’s before it
12:02 breaks a sweat and really has to compete
12:04 with gold. Bitcoin has to go 750% more
12:09 before it even starts really competing
12:11 with the price of gold. uh gold’s worth
12:13 like 18 trillion and Bitcoin is only
12:16 worth two trillion. So there’s a long
12:17 way to go even to compete uh with gold
12:20 and then we can start debating whether
12:22 it’s two times better than gold, three
12:23 times better than gold, five times
12:25 better than gold. So but regardless, you
12:27 got 700 you got a an 8x at least eight
12:31 times its current value. Uh somewhere
12:34 between eight and nine times its current
12:35 value just to get to the point where the
12:38 total market cap of of Bitcoin is
12:39 equivalent to the total market cap of
12:41 gold. We got a long way to go and it’s
12:43 going to be a very exciting ride for
12:45 decades to come, but especially the next
12:47 few years. Thanks everyone.