I backtested "taking a loan to buy Bitcoin" vs DCA across every month since 2016. Here's what 10 years of data shows.
 | TLDR: Even at 15% APR with 30% down, buying Bitcoin upfront on a loan beats DCA 67-89% of the time depending on the term length. But only if you don't get liquidated. I posted a similar idea on this sub a few months ago and got roasted. I got humbled and looked at the data. For every month from Jan 2016 to Feb 2026, I compared two strategies using the same total dollar outlay. Strategy A: put 30% down, borrow the rest at 15% APR, buy all BTC upfront, repay monthly. Strategy B: take that same total cash and DCA it over the same period. DCA actually gets more dollars to deploy because it includes interest payments. The loan still wins the majority of the time. The longer the term, the wider the gap. At 1 year the loan wins 67% of the time. At 5 years, 89%. Now the part that matters. I also simulated what happens with traditional crypto lenders. If BTC drops 50%+ from your entry price, they force-sell your Bitcoin to cover the loan. Everyone in my last post was right to bring up this crash risk. The periods where liquidation gets triggered are almost always ones where you bought near a top and DCA would have been the better play anyway. You already timed it badly. Liquidation just makes it permanent by selling your BTC at the worst possible moment instead of letting you hold through the recovery. A mate of mine went through exactly this in 2022 with a B2X on Ledn. BTC dropped, hit the liquidation threshold, Bitcoin gone. Your typical mortgage lender in tradfi doesn't repossess your house because prices dipped. But that's exactly how crypto lending works today. Liquidation makes bad timing permanent. And I think that's a design problem. I built a backtesting tool so you can test this with whatever assumptions you want. Code is open source. What if there was a loan product that worked like a mortgage? The data makes me think there's something here but the last post made it seem like nobody wants this. Genuinely curious what the sub thinks. [link] [comments] |
