Today, a friend in the crypto world asked me, he has 60,000 yuan, and asked me what to buy, when to buy, and how long it should take to buy. What he actually means is that he wants to take advantage of the current situation to buy in, what method can he use to buy more, then ride the bull market for a wave of profit and sell it off, and then buy back in the bear market.
My answer is that no method is useful; in the short term, you cannot achieve a certain increase in your holdings.
Getting caught up in strategies is actually useless. What is truly useful is the method that continuously increases cash flow. For example, you have caught the explosive new narrative opportunity in the industry.
How long is it appropriate to dollar-cost average an amount of capital? Actually, I have done backtesting, and my answer is 10 months.
If you invest 1 million over 4 years, you will definitely earn less than if you invested it all in 10 months. The reason is that the cryptocurrency market changes too quickly; a year is a stage of development.
Generally, we say that holding long-term for 8 years is two major cycles, not dollar-cost averaging for 8 years. Dollar-cost averaging for such a long time is a helpless choice, because the ability to make money is limited. You can only earn a little and invest a little. Dollar-cost averaging is what you do because you have no other choice. If you have options, it is definitely more cost-effective to establish your position within a year.
My strategy comparison below: A fixed amount of capital invested over 10 months has advantages greater than a lump-sum investment, which in turn has advantages greater than a 4-year dollar-cost averaging approach, which is greater than a lump-sum investment at the peak of a bull market. But these are merely advantages; if you hold it for 10 years, it will have no impact on your quality of life, as we say, as long as it can rise at a rate of 50%.
As for selling in a bull market and buying back to increase holdings, some people have achieved this, but there is definitely an element of luck involved. Because it is luck, good luck certainly belongs to a very small number of people, so most people cannot achieve it.
If you explain it with logical probability, it’s too complicated, and no one would want to hear the reasoning.
So I will write a somewhat nonsensical and slightly sci-fi description.
The current you belongs to this time-space. You encountered my article and met me by chance; you became my member. I told you to decisively buy BTC at 17,000, and you obediently bought it. During this time, you kept asking me whether to sell since you had made quite a bit of profit, and I said not to sell. Now you have it. You didn’t interfere with the price changes.
However, in another time-space version of you, in what we call a parallel universe, there is another you. You did not encounter me because you caught a cold that day and went to bed early without checking your phone. You didn’t see me, but later you learned about BTC from the news. However, it was in a bear market at 17,000 dollars, and you did not dare to buy. You bought a little at 30,000, and sold again at 48,000, making a profit. You were quite happy. Your actions interfered with Bitcoin, and at that moment the price became a fact; the cause you created has led to today’s result of not making money, and the price and your lack of profit became historical traces.
Of course, looking back from the current point to the past two time spaces, the past scenes have already been observed by you, and then the price trends have collapsed, becoming historical traces. With the memory of these traces, you can easily know that the previous lowest price of BTC was 15,500; from your current perspective looking back, you certainly know that buying at 15,500 would have guaranteed profits by now. But at that time, you did not know.
You just think you know, and you have made plans: to buy at this point and sell at that point, and to buy again if it drops. But when you do that, the material world of this time-space collapses because of your intervention; you observed the price, and your actions interfered with the development of the material world. At that moment, the material world’s price collapses around you, splitting into three time-space versions of you: one who holds without selling, one who buys and then sees a sharp drop, and one who buys and then sees a surge. Therefore, it is inevitable that in the future time-space, there will be a version of you that experiences a loss after buying. This losing version emerges independently in this time-space, becoming the 'chives' of this world. That is all because you tried to interfere with the secrets of the universe by observing the development of price trends.
Why does buying always result in losses? Because you bought, you also observed; the moment you bought at a certain time-space node collapsed, becoming your historical trace. No matter how you buy, buying will result in a loss. Meanwhile, in another time-space where you bought and it skyrocketed, you became the revered 'scythe god' of that world.
If your actions do not interfere with the material world, you buy nothing, and Bitcoin is irrelevant to you, then this world cannot produce your huge profits or huge losses; you remain the same you. Or you buy and never look at the price again, then you will never affect the price of Bitcoin; both losses and gains are chaotic and unknown, and it will never collapse because of your observations and your actions.
How to achieve not caring? That is to have enough money to buy, enough awareness to accept price changes, and not actively observe the price. Then the results of losses and gains will never occur.
The moment Bitcoin is desperately needed by the world, it will actively let you know that you have made a huge profit. This profit is not something you can achieve through strategies; it is merely a trace left by the development of the world.
Keep it up! I am Little Seven, a veteran who sincerely wishes you wealth in the crypto world.
Continuously pay attention to BTC, ETH, BNB.
Bulls have their strategies, and bears have their ways of playing.
Little Seven will not lead fans to blow up positions, nor will he blindly enter trades.
It's all about seeking victory steadily, taking steady steps; those who want to profit should follow Little Seven's lead!
