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I ran an analysis on the effect of weekly vs monthly DCAing into BTC for the year 2021

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by COINS NEWS 244 Views

Title says it all, I used my space time waiting for my science equipment to warm up to analyse the numbers on BTC if you did a weekly vs a monthly DCA investment for the entirety of 2021. Some rules for the calculation:

Both started on 1st January 2021; Weekly followed every 7 days and invested £250 with the last investment on 31st December. Monthly followed on the 1st of each month and invested £1000 each time with the last investment 1st Jan 2022.

Values were taken manually for BTC from Coinmarketcap.

I ignored the effects of fees and taxes as that differs a LOT on investment quantity and exchange etc.

Money invested

Weekly = £13250

Monthly = £13000

Present day value

Weekly = £11317

Monthly = £11432

Loss/gain percentage (Based on present day value of BTC)

Weekly = 85% of invested value

Monthly = 88% of invested value

So it turns out that actually the numbers smoothed out quite reasonably over one year and that the DCA time period had almost no noticeable effect on the outcome. Technically monthly would have been a better method but the values have so little in them that it could easily have been the other way around.

Having said that monthly was the higher value AND as bigger lump sum deposits tend to have less fees as a percentage of invested value there is a strong argument for a monthly over weekly DCAing.

submitted by /u/xavierwest888
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