Experience with Dollar Cost Averaging and Lump Sum Investing
Dollar Cost Averaging (DCA), simply put, is a "couch potato investing" strategy for many. This is great for people who
Don't want to follow the markets and investments very closely
Don't want to guess which way the market is going
Have a long time horizon
And content with riding the systematic economic expansion, or in crypto, user base and ecosystem expansion
DCA is great for people who are starting out without a lot of capital, and can be used as a forced saving/investing tactic to "pay yourself first"
Lump Sum Investing is typically a one time or infrequent investment. You buy it once and it does not repeat on a regular interval
This can be the first time you buy the crypto, just want to "get-in" so you are no longer a no-coiner, and you are unsure if this is right for you
This can be a "top-up" after a market sell off, with the extra cash you have on the sideline
This can be after you have sold a property, received a significant payout, closed a big sale, receive an inheritance, or in rare case won the lottery, and you put the money to work
My investment style is doing both
A portion of every pay goes into DCA (invest and forget about it), and another portion is set aside as "dry powder"
The savings set aside are used for lump sum investing when an opportunity arise, you know, "buy that dip" (that keeps on dipping and dipping and hope I don't run out of funds) :)
It is important to keep some powders dry to capitalize that once a decade or cycle opportunities for the potential of an outsized gain.
For example, April 2020 when oil price went negative due to supply significantly outstripped demand, this is an outlier event and is not sustainable. People still have their cars, travel will come back eventually, the market will work itself out. Some companies will go belly up and there were a lot of collateral damages (everything was down down down including bitcoin), but the strong ones will emerge stronger after this crisis as post-crisis there will be less competitions - same thing can be said for crypto as well, lots of shitcoins are turned into worthless zombies. This is the exact moment where having the dry powder affords you to capitalize those opportunities.
Those deep discounts don't come often in the traditional market, but in crypto the extreme volatility happens more frequently and in shorter cycles. What goes up must come down, but for a growing and expanding market it will be higher highs and higher lows overall (and there will always be those that don't make it). As the userbase and use-case continue to expand - crypto is still in the systematic growth phase and it is not going to end any time soon. Why? Look around you, there are still so much untapped opportunities!
It can be very uncomfortable while the market is going down, but those are excellent buying opportunities. People who have picked up shares or coins at discounted price level would be glad that they did, whether it is through DCA or the courageous and calculated lump sum at a price that is much lower than you would be willing to pay for not too long ago.