Coin Metrics researchers found that out Investors whose dollar cost has averaged Bitcoin (BTC) since peaking at $ 20,000 in 2017 will remain profitable. According to the researchers, an investor who has continuously bought BTC over the past three years would have a 61.8% return.
Although the price of Bitcoin has dropped significantly from $ 20,000, there were extremely low points in 2019 and 2020. Investors who have benefited from these strong downtrends will easily benefit from today’s big gains..
Coin metrics said::
“Even though Bitcoin is still trading 30% below ATH, the average dollar cost would have returned since the December 2017 market high [sic] 61.8% or 20.1% annually. Similarly, for Ethereum (still 71% below its high), the dollar cost averaged since January 2018 would generate a return [sic] 87.6% or 27.9% annually. “
Graphic to show the positive performance of BTC from the averaging of the dollar costs. Source: Coin metrics
The data shows the bitcoin resistance
In the early days of Bitcoin, high profile investors and financial institutions doubted its viability. Some companies were cautiously bullish on cryptocurrencies, but most kept their distance from the emerging asset class.
Over time, With the price of Bitcoin rebounding strongly from extreme corrections at $ 3,150 and $ 3,600, investor sentiment has shifted. In June, JPMorgan, whose CEO Bitcoin publicly criticized in 2018, said that the leading cryptocurrency is persistent.
A team of strategists from JPMorgan, led by Joshua Younger and Nikolaos Panigirtzoglo, also emphasized this The March crash showed Bitcoin’s longevity.
As billionaire investor and hedge fund legend Paul Tudor Jones put it, Bitcoin gets stronger with every day it survives. Compared to other asset classes BTC is still relatively young, which makes it attractive to investors.
Bitcoin’s longevity, stamina and resilience have enabled the digital asset to recover from major setbacks relatively quickly.. This cycle of high peaks and extremely low bottoms makes cost averaging a profitable way to get exposure to Bitcoin.
The realized price reaches USD 6,000
The data also shows that Bitcoin price action is largely cyclical., an additional function that makes cost averaging more effective. Coin Metrics’ announcement also coincides with Bitcoin’s realized price, which for the first time in history exceeds $ 6,000.
The capitalization, or the realized price, tries to determine the price at which every investor has bought Bitcoin in the past. Glassnode describes the metric as follows:
“Realized capitalization” evaluates different parts of the offer at different prices (instead of using the current daily closing). In particular, it is calculated by valuing each UTXO at the price of the last move. “
The realized price of Bitcoin reaches USD 6,000. Source: Glass knot
Bitcoin’s record price shows that the number of addresses buying BTC at higher prices has increased. This indicates that An influx of new investors came as the price of BTC rose.
On-chain metrics show that bitcoin momentum increases as new capital arrives. New investors with a long-term strategy may find the dollar cost averaging results quite convincing.