You might not believe it, but I had already planned this week's topic, and it's not just because Bitcoin's price has surged past USD40,000 again. If I had to choose, I’d rather talk about it during a bear market. Let's assume Bitcoin is currently priced at USD30,000 for our discussion. After all, my main point is not about the specific numbers, but the mindset.
On December 1, 2020, three years ago, I wrote "Buying $100 of Bitcoin Every Day" in my column #decentralizehk in Apple Daily before it was shut down. Last year, I published "Moneyverse: how investment works in the multiverse" which was on limited sale until the end of November. On December 5, 2022, exactly a year ago, I started issuing NFTs to readers one by one. The book also includes this article, which is essentially the same as the newspaper version with minor text polishing. It can be condensed into three points, 50 words:
1. Hold cryptocurrency, don’t be choosy, start with Bitcoin.
2. Don’t pick the time; the best moment is today.
3. Regular and fixed-amount investing; no matter how high or low the market goes, buy $100 daily.
Whether you took action after reading the newspaper three years ago or after reading the book a year ago, let’s look at the data and review the results.
Five Key Entry Times can all be Profitable
Let's first look at the results:
The above table screenshot is from http://bit.ly/decentralizehk-btc-dca, a Google Spreadsheet I created three years ago. It was also used in my later "Financial Freedom" course, with new data added over time. This online document has been kept publicly accessible for reading. Anyone who finds it useful can freely copy it. The format is plain, but the only little trick is a simple formula for generating Bitcoin's historical price table, as seen in cell A1. By entering this function, the system will automatically list the daily price of BTC for the specified period, which is very convenient:
=GOOGLEFINANCE("CURRENCY:BTCUSD", "PRICE", DATE(2017,12,17), DATE(2023,12,1), 1)
I selected five representative times as starting points:
- December 17, 2017: Shortly after I joined the industry, Bitcoin reached a near-historic high of almost USD20,000, then plummeted, falling to just over USD3,000 by the end of 2018 and early 2019.
- December 1, 2020: Three years ago, when "Buying $100 of Bitcoin Every Day" was published in Apple Daily.
- April 13, 2021: About four years later, Bitcoin hit another high of USD63,588, fell to just over USD30,000, then rose again above USD60,000 in November of the same year, gradually entering a bear market, with the lowest period maintaining at over USD16,000.
- December 1, 2021: Two years ago.
- December 1, 2022: One year ago, when "Moneyverse: how investment works in the multiverse" was published.
Next, I simply calculated how much BTC could be bought with USD100 on each day, ignoring transaction fees. Finally, I calculated the total investment, the amount of BTC obtained, the average purchase price, and the return on investment from buying USD100 Bitcoin daily from these five dates until November 30, 2023.
Interestingly, the follow-up article "Getting on Board with Bitcoin FAQ" to my column posed the first question: "Isn't it harmful to tell people to buy Bitcoin just as it breaks USD40,000?" Three years later, I can finally confirm that my advice wasn't harmful and can breathe a sigh of relief. It's clear that no matter when you start buying $100 of Bitcoin daily, as long as you persist, you won't lose money. Even if you FOMO in on the day of the all-time high and it continues to fall, dropping to 5% of the entry point, as long as you "persistently FOMO" and don’t lose confidence and sell at a low, stretching the time long enough can still be profitable.
Assuming your $100 is in USD, even in the shortest period, a year later, you could own 1.43 BTC, joining the ranks of 'whole coiners,' those who own at least 1 BTC. Given Bitcoin’s capped supply, there can be at most 21 million whole coiners worldwide. With a global population of 7 billion, that's only one in every 333 people, though the actual number is much less. If you can only buy HKD100 or NTD100 daily, you might not become a whole coiner, but since the logic and algorithm are unaffected by the amount, you are still making the right move. Buy a fixed amount daily within your means.
As for how long to maintain, it's best to keep buying daily if possible, otherwise, aim for four years or more. While no one can predict short-term market conditions, which is the key to endorsing regular, fixed-amount investing, Bitcoin's halving every four years and historical data roughly follow a four-year cycle. Investing for 1, 2, or 3 years is not impossible, but continuing for 4 years gives more confidence to cover an entire bull-bear cycle.
After saying so much, you might have forgotten that the above table is based on the assumption of a Bitcoin price of USD30,000, a conservative perspective for examination and writing this article. At this moment, as I type, the exchange rate for Bitcoin is USD41,684. The actual review three years later is as follows:
The numbers speak for themselves, so I won’t elaborate further.
If you say that Bitcoin has only just surged past USD40,000 and that my conservative estimate of a 28% discount on the current market price is not cautious enough, and if Bitcoin is still at USD20,000 now, even after continuously buying $100 worth of Bitcoin every day for three years, you would still incur a loss, then I can only agree with you. In that case, perhaps it's best not to buy Bitcoin or any cryptocurrency. Everyone has their own lifestyle and must take responsibility for their decisions, and I completely respect your free will. Besides, I don’t earn a commission even if you do make a profit from buying. My goal in writing articles is simply to help more people change their fate through knowledge.
Have I followed my own advice?
Let me pose a question on behalf of the readers: "You talk the talk, but do you walk the walk? Have you put your money where your mouth is?"
In the article from three years ago, I mentioned that I was buying Bitcoin regularly in fixed amounts. However, I must admit that I couldn’t continue this for four years due to several reasons.
Firstly, going back to December 1, 2020, the day the article "Buying $100 of Bitcoin Every Day" was published in Apple Daily, you might not remember what you did that day, but I clearly do. The day before was my last working day at LikeCoin's "Appreciation Civic Foundation", and then the foundation started its dissolution process on December 1, 2020. Since then, I haven’t had a full-time job. Sometimes I say I'm a full-time writer, sometimes I describe myself as a slasher in writing/teaching/entrepreneurship, and other times as a digital nomad. I meet the government's definition of a "retiree", but when filling out forms and asked about my occupation, I flexibly choose the least peculiar option. Whatever the label, the bottom line is I don’t have a salary, so naturally, it’s difficult to convert the fiat currency I earn into Bitcoin.
Secondly, since 2017, I've already bought Bitcoin and other cryptocurrencies at different times and have enough. There's a saying that one can never have too much money, but I've almost exhausted all my fiat currency. Even if I had any left, it would primarily be stored in stablecoins. Being jobless, I have to be content with what I have. If I set aside practicality and only consider "investment," I find that after analyzing transaction records, even with meticulous timing, the returns over a longer period aren’t much different from buying 100 yuan worth of Bitcoin daily. I was luckier, with a slightly higher return than regular, fixed-amount buying, but that's because I hadn't considered one significant cost: time and effort. Regular, fixed-amount investing not only ensures earnings given the right asset and enough time, but it also frees people from the mental burden of investing. It allows them to focus on work, learning, and enjoying life.
Lastly, the proposal to buy $100 of Bitcoin daily has some underlying assumptions, such as having a certain surplus, needing to allocate assets, or deciding to buy cryptocurrencies but still being unclear about which ones. However, these assumptions no longer apply to me, especially since what I value most is practice – earning money to spend it, and spending it to practice. When practice is the starting point and asset allocation is secondary, it influences the choice of assets. Last month, in my article on MEMECOIN, I mentioned owning more Ethereum than Bitcoin, which surprised some readers, but it's related to this mindset. Due to space constraints, I won't go into detail here, but I can discuss this topic in another article if there's interest.
Talking Less, Acting More
Buying $100 of Bitcoin daily is the only specific advice I've offered in the investment field.
Some might think the logic of regular, fixed-amount investing is too simple, almost to the point of being obvious, and seek more insightful advice. However, some truths are just that – plain and simple, right before our eyes. All it takes is honest and straightforward action to achieve considerable success. Yet, we often overlook the obvious in search of more effective, sophisticated strategies.
Even if regular investing is as trivial as saying "a mother is a woman," how many actually practice it diligently? Among my readers, I fear less than three in a hundred do. Perhaps thirty agree, but I can imagine some saying they lack funds, others that they don't have time to research, and still others agreeing but thinking the opportunity has passed. Various excuses, like ten boys deciding to put out a fire but one by one backing out until none are left.
In response, all I can do is tirelessly repeat my same old simple truth from every new angle whenever I get the chance. Each time I manage to convert even one more person, I feel like I’ve done well and made the world a slightly better place.
So, I propose a rendezvous with you all. A year from now, regardless of whether Bitcoin falls to 4,000 or rises to 400,000, let's revisit this topic and review the effects of buying $100 of Bitcoin daily over a complete Bitcoin halving cycle. Let's avoid losing sleep over it and see what unfolds.
Extended Reading
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