Can we discuss dollar cost averaging (DCA) as an investment strat?
I'm new here, so please don't downvote me to hell. I have seen a lot of people here using DCA as an investment strategy on BTC. I understand that the idea is "just buy BTC" at a regular interval, whatever the price is. In theory, this should even out price volatility over the years.
But BTC volatility is legendary, the huge price swings can be 5x or even 10x in a month. For that reason, I would argue that DCA is the worst strategy for buying BTC. If something (anything) just 5xed in price, I am definitely not buying it. Common sense tells me that the price will drop at some point. If I bought BTC before the 5x pump, logically I immediately sell it and 5x my money.
Also, I don't need BTC to get through life. If I did need BTC to survive, I might consider buying it when prices double, on the off chance that the price might double again and I'd be forced to buy at 4x.
I believe timing is important when buying and selling assets and goods. A dozen eggs is $12 at the grocery store right now. I don't think that price will go to $24. If I want to bake a cake, I will wait until the price of eggs drops again. Used car prices went crazy last year, I kept driving my crap car for another year until the prices dropped. When gas prices doubled, I stopped taking road trips. Real estate is overvalued and interest rates have quadrupled, so I'm selling my house.
To me this is all common sense. If I had extra money and didn't care about prices, I wouldn't think about any of this. But isn't the purpose of investing to make money?