The DCA/lumpsum debate depends on how fast market recovers.
 | There is always a debate as to whether DCA makes sense or lumpsum at a loan. To test it out, I used some generic AI tools and mapped Bitcoin's 50% drawdown dates from previous ATH. I then calculated how long it took to reach a new ATH from 50% drawdown. I then ran two calculations, one the net profit you made if you invested 100k at a 15% interest only loan and what your profit would be at new ATH and the other if you just invested an equal amount of money in the form of DCA between the 50% drawdown and new ATH such that it reached 100k cumulative. DCA wins if the recovery is slow whereas Lumpsum wins if the recovery is fast. Since a lot of this is AI generated, there might be errors, if so, please point them. [link] [comments] |
