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Bitcoin and stoicism - Week 5: DCA strategy is the best strategy
278 sats \ 3 comments \ @softglitter2d 30 Mar 2023 bitcoin
As Bitcoiner, I firmly believe that the digital currency is the future of money. Bitcoin offers many advantages over traditional forms of money, including its decentralization, security, and limited supply. But in order to reap the benefits of Bitcoin, one must adopt a long-term mindset and commit to accumulating Bitcoin over time.
One of the best ways to accumulate Bitcoin is through a dollar-cost averaging strategy. This strategy involves investing/saving a fixed amount of money at regular intervals, regardless of the current price of Bitcoin. By doing this, you can take advantage of market fluctuations and accumulate more Bitcoin when prices are low, and less when prices are high.

It's a strategy under your control

But why is it so important to accumulate Bitcoin over time, rather than trying to time the market or make a quick profit? The answer lies in the philosophy of stoicism, which teaches us the importance of focusing on what is within our control and accepting what is not. Regarding bitcoin's case, we can't control its price fluctuations or the actions of other market participants. What we can control, however, is our own behavior and the decisions we make.
By committing to a long-term strategy of accumulating Bitcoin, we are focusing on what is within our control and accepting that market volatility is simply part of the journey. As the ancient stoic philosopher Epictetus once said, "Do not seek to have events happen as you want them to, but instead want them to happen as they do happen, and your life will go well."1
It's also important to note that accumulating Bitcoin is not about the amount of Bitcoin you have, but rather the act of accumulating itself. By regularly save in Bitcoin, you 're developing the habit of both saving and investing, which can have a positive impact on your overall financial well-being. As another stoic philosopher, Seneca, once said, "It is not that we have a short time to live, but that we waste a lot of it."

My NFA

So, to all those who are new to saving and investing, my best NFA is adopt a long-term mindset and commit to accumulating Bitcoin through a dollar-cost averaging strategy. Remember, it's not about the amount of Bitcoin you have, but the act of accumulating itself that will lead to a better financial future. And as the stoics teach us, focus on what is within your control, accept what is not, and your life will go well.
Eat well. Do exercises. Stack sats. Enjoy your life.

Footnotes

  1. I like this quote, it's my new fav saying. ↩
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0 sats \ 2 replies \ @Undisciplined 30 Mar 2023
Something interesting to consider:
You are implicitly treating the dollar as real money while maintaining that eventually Bitcoin will be the real money.
When it comes to a dollar-cost averaging approach, you spend a fixed amount of money on the investment, but what happens when you're selling a fixed share of an investment?
As the dollar becomes not-money does the strategy change? I've never read about the inverse of dollar-cost averaging for winding down an investment.
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0 sats \ 1 reply \ @softglitter2d OP 31 Mar 2023
Would you explain further? I see the point but I don't follow the scenarios
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0 sats \ 0 replies \ @Undisciplined 31 Mar 2023
The point of dollar cost averaging is to take advantage of the greater volatility in your investment than exists in your money.
If Bitcoin becomes money, then at some point the dollar will be the "investment" that has greater volatility. However, you're not trying to build up that investment, but rather you're trying to wind it down.
I'm just not sure if dollar cost averaging is still the prudent strategy in that scenario. It would be analogous to selling a fixed number of stock shares every month, regardless of their prices.
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