Everyone always says that you can't beat the market, so you should DCA (dollar cost average), meaning, you should buy crypto in regular intervals. But no one ever says how often exactly. Once an hour? Once a month?
I simulated different scenarios. I used Bitcoin for the simulations, a span of 4 years (May 2018 - May 2022) and calculated with buying for $2 an hour.
Results
First let's go over the results, so I don't bore you with how I've calculated it. If you're interested in this, see below.
| Interval | $ per buy | Total money spent | Current worth | Profit % |
|---|---|---|---|---|
| Hourly | $2 | $70'866 | $234'601 | 330.96% |
| Twice a day | $24 | $70'896 | $234'701 | 331.05% |
| Daily | $48 | $70'896 | $234'843 | 331.25% |
| Weekly | $336 | $70'896 | $235'093 | 331.60% |
| Every 4 weeks (~monthly) | $1344 | $71'232 | $236'869.98 | 332.53% |
| Twice a year | $8736 | $78'624 | $219'799.80 | 279.56% |
So as you can see; the difference between once an hour and once every 4 weeks is surprisingly low. But bump it up to twice a year, and you really begin to miss out on the good days to buy in.
How I've done it
I've downloaded the hourly prices of Bitcoin over the last four years, then put them in Excel. Afterwards I just made some automatic tables with certain formulas to simulate the various buy events. At the end I pulled the data together with other formulas.
Conclusion
Tbh I don't really know what's the conclusion of this. Nobody DCAs twice a year. And as long as you stay within a month, it doesn't really seem to make too much of a difference.
Something that goes without saying; the past doesn't necessarily predict the future. The next four years can be wildly different than the last four. Maybe I could run the simulations with stock indexes, that could also be interesting...
I have a lot more data in the Excel sheet. If you have any questions, I'm happy to answer them.
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