A no-fail trade? Bitcoin traders who dollar cost average are profitable

The weighted average cost of purchased Bitcoin recently reached a level signifying that all investors who have consistently dollar-cost averaged into Bitcoin (BTC) are now in the black, regardless of how long they have been holding.

Just a reminder that every single pleb who has been dollar cost averaging #bitcoin is now in profit no matter when they first started DCA’ing. Every single one of them! pic.twitter.com/pnuIqdQznM

— Wicked (@w_s_bitcoin) July 3, 2023

This news comes despite the price of Bitcoin as measured in US dollars still being down by over 50% from its all-time high of around $69,000.

And yet, many financial pundits in the space still cling to the notion of Bitcoin’s entire existence and market cap of nearly $600 billion being based on a Ponzi Scheme of some sort. Others continue to deny that saving in the hardest form of money ever known has, so far, been an excellent investment thesis – one that has outperformed all others.

Yes, there may be risks. And yes, volatility definitely comes with the territory. But looking at such factors in a vacuum does not make for adequate analysis of any investment. The alternative strategies available must be taken into consideration, along with other variables such as:

• What is the current macro environment, and how might it change going forward? What impact might this have on different asset classes and their performance?
• What risk/reward ratio does one strategy offer in comparison to others?
• Can diversification lead to an optimized risk and return profile, or does YOLO’ing all-in provide better returns?

These are just a few potential questions that could be worth investigating when it comes to allegations against dollar-cost averaging into BTC for the long-term.

Let’s dig into some data that can help shed light on all of this.

Bitcoin outperforms traditional investments

Some investors, like those at Adamant Research, have been pointing out the reality of Bitcoin’s most favorable risk/reward ratio for many years:

“We assert that the long term risk reward ratio for Bitcoin is currently the most favorable of any liquid investment in the world. We expect for it to trade in a range of $3,000 to $6,500 after which we foresee the emergence of a new bull market.”

The group made similar statements during the bear markets of 2015 and 2011 as well.

How has a standard 60/40 portfolio fared over the last 5 years? What about gold? Real estate?

The following chart illustrates the relative performance of several…