Bitcoin Dollar Cost Averaging Over 3 Years Yields a 70% Gain: PlanB

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In Brief
  • Bitcoin dollar-cost averaging (DCA) between 2017 and 2019 yielded potential returns of 70%.

  • PlanB's Bitcoin DCA chart highlights a suitable long-term investment strategy for BTC.

  • DCA helps to offset the effect of volatilty on the earnings from investment positions.

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Bitcoin (BTC) analyst and creator of the hugely popular stock-to-flow (S2F) model, PlanB (@100trillionUSD), has published a chart showing the potential returns of dollar-cost averaging (DCA) over three years.

As an investment strategy, DCA involves investing an average amount in an asset over a regular interval to offset the impact of volatility on its spot price.

Tweeting on Wednesday, PlanB showed that a trader who used DCA to enter into BTC positions during 2017, then HODL in 2018, and finally, DCA out in 2019 would have earned an impressive yield of around 70%.

Indeed, since 2014, PlanB’s chart shows that returns from a three-year DCA investment strategy would generate a 2x yield more than half of the time.

According to PlanB’s figures, the odds of earning at least a 200% return from the 3-year DCA schedule stands at 68%, a remarkably higher figure than the 13%, and 19% for returns below 100% and between 100% – 200% respectively.

When asked on Twitter when to step into the trade PlanB responded:

“It doesn’t really matter much because the (historical) odds are 9 to 1 that you earn a positive return.”

DCA is often a preferred investment strategy for assets with wild volatility swings. Data from dcaBTC – a platform that tracks the profitability of Bitcoin DCA – shows that buying $10 in BTC every week ($1,570 in total) over the last three years would put the investor up by 51.4%. And as BeInCrypto has previously shown, about 79% of all Bitcoin in supply is in profit.

DCA, like ‘stacking sats’, does not require the investor to monitor Bitcoin’s daily price swings. It also ensures that a BTC holder can earn the gains that emerge during the ten days in which the cryptocurrency historically generates its best annual performance.

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Osato is a reporter at BeInCrypto and Bitcoin believer based in Lagos, Nigeria. When not immersed in the daily happenings in the crypto scene, he can be found watching historical documentaries or trying to beat his Scrabble high score.

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