💬 Introduction

As of June 2022, we are witnessing a severe down-trend which will most likely end up stabilising in a sideways range that could extend itself for several months given the macroeconomic environment. This is the perfect window to employ a dollar-cost average (DCA) strategy but not a simple one. When one thinks of DCA, easily associates with the saying:

Time in the market beats timing the market.

SumCap strictly believes this common saying with regards to eyes on the market but we deeply believe it’s wrong when talking about money invested on the market.

🔬 Analysis

Statically speaking, a Lump Sum Investing (LSI) strategy - one-time purchase - usually beats any DCA variances:

In crypto markets, the same happens, hence our opportunity to be DCA inside an optimal LSI window. Intrinsically a mix of both.

But then, inside this window to DCA, there’s multiple ways and tools on how to do it.

Some of the most known DCA variances include:

• Basic/Simple: Every Y condition (e.g. time period), buy X amount;
• Value: Buy more than the usual X amount, when it is following a negative period;
• Momentum: Buy more than the usual X amount, when following a positive period, less when following a negative one;

Discarding the less optimal one — the Basic, and looking into the Value one, we are reminded of a another well known slang, which applies perfectly to crypto markets:

The market can remain irrational longer than you can remain solvent.