I shared a post mentioning that I'm DCA my ETH back to BTC because BTC dominance has hit an all-time low in the past 1666 days. And there's no other upcoming big news and narratives after the merge, so I assumed that BTC dominance would bounce back up in the following months.
I still believe BTC dominance will gradually recover until the next bull market. Ideally, I should swap everything back to BTC and waiting for the BTC dominance to form a local top, then buy back the alts that I'm willing to hold. But if I do that depends on my gut reaction; it'll quickly fall into a "Buy high sell low" play.
Strategy to grow my Bitcoin in the following 2 years
Instead of timing the top or bottom, I prefer DCA to whatever my strategy is. Not just simply DCA my dollars to BTC.
If you guys followed my previous post, I shared my Bitcoin strategy, which aims to increase my BTC amount. ➡ You asked for it, and here it is! My Bitcoin strategy after DCA with my paycheck)
It's the strategy that profits from the correlated pattern between BTC and ETH.
correlation between BTC and ETH
In simple words, hold BTC at ①; sell BTC to ETH at ②, and buy back BTC with ETH at ③. You can read my previous post if you're interested in more details.
Don't time the entry, DCA Bitcoin into the strategy
So I have done a quick backtest. What if I DCA my Bitcoin into the strategy, let's say 1 BTC per month? Here are the results:
- A. DCA into the strategy with 1 BTC every month for the last 24 months.
- B. DCA into the strategy with 1 BTC every month for the last 6 months.
| total investment | final value | ROI (in BTC) | |
|---|---|---|---|
| A (long term) | 24 BTC | 30.73 BTC | 28.04% |
| B (short term) | 6 BTC | 7.5 BTC | 25% |
Although the past results do not mean it'll be the same in the future, I still feel like this strategy is worth running, so I'm going to record and share my whole journey with you all.
Getting started
Just a quick note and a brief summary of what I'm going to do now
- Goal: Earn more Bitcoin.
- Strategy: Profit from the highly correlated pattern between BTC and ETH.
- Tool: Grid trading bot.
- Investing method: DCA Bitcoin into the strategy to spread my entire investment. OR Add more Bitcoin when there's a black swan event.
- Invest period: Around 2 years.
Cause the ETH/BTC price dropped from 0.085 to 0.07 after the merge, it's a good time to start the strategy for me.
| Date | Investment | BTC Price | ROI |
|---|---|---|---|
| 9/21/2022 | 0.75 BTC | $18,826 | - |
I'm running this strategy on Pionex; here's the step-by-step guide cause some of you asked me for that in the last post.
- Step-by-step guidance: https://www.pionex.us/blog/how-to-start-pionex-long-term-bitcoin-earning-strategy/
Here's the proof that I just started the strategy today 👇
I'll add some more funds and share the latest performance every month, wish me luck!
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