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Compounding and Saving in Bitcoin: The Power of a Dollar-Cost Averaging Strategy – Yahoo Finance

Frequently, I hear other advisors say, “I can’t buy bitcoin for clients; it’s too volatile and adds too much risk.” They’re also worried about purchasing power and inflation with savings rates at 0.50% or less. Bitcoin is an emerging asset class with a market cap of over $1 trillion. Bitcoin is often called a store of value, and its goal is to be better money. It achieves this by consensus rules and not allowing any single entity or group to change the monetary properties without the majority agreeing.
Before you question bitcoin’s store of value component, let’s look at the U.S. dollar. Consider that the dollar has lost 91% of its purchasing power since 1950, and the creation of dollars has accelerated dramatically since 2020. Now, let’s look at bitcoin as a savings tool and technology – particularly, through a strategy of dollar-cost averaging, the consistent purchasing of something over an extended period of time. You don’t go “all-in” in this strategy, but instead look to allocate an amount over a predetermined period of time. This period can have an end date or simply be until you decide to stop.
First, let’s say hypothetically that you had the worst luck with timing ever. You bought the absolute top of the first bitcoin cycle in 2011; if you held for 37 months, you did not lose money. (Rarely would I advocate for a large single lump-sum purchase hoping to find the “right” time to buy bitcoin.) If you understand scarcity and that there will never be more than 21 million bitcoin, when it comes to trying to time the perfect buy, this popular Chinese proverb rings true: “The best time to plant a tree was 20 years ago, and the second-best time is now.”
You will never be able to time the perfect entry in any initial purchase. The chart below shows the compound annual growth rate (CAGR) of bitcoin over various periods while buying at different intervals. Again, if you had the world’s worst timing and started dollar-cost averaging monthly right into the 2017 price run-up from under $1,000 to a peak of $20,000, you would have still compounded at over 48%.
Bitcoin is a savings technology and a store of value when you save consistently. As advisors, we advocate that clients automate savings all the time when planning for goals and retirement. Now you’re using a better method to help them save. You don’t need to turn off all the savings they are doing in other assets. An option here, for example, is to carve off a portion for bitcoin and allow the adoption rate of bitcoin, which is rivaling that of the internet in 1997, and network effects of better money work in your client’s favor. Thinking about volatility? Dollar-cost averaging reduces that impact.
Looking toward the future, you might question the likelihood of these CAGRs. Let’s remember that bitcoin is a $1 trillion asset with limited retail, institutional and nation-state adoption. Bitcoin investment firm NYDIG estimated in January of this year that 10% of Americans owned bitcoin. (There was no mention of the dollar amount owned, which would lead one to believe the percentage with serious capital allocated to bitcoin is significantly lower.)
Notably, based on data on rolling four-year CAGRs for bitcoin, the absolute worst time frame was from April 9, 2013, to April 9, 2017, with a CAGR of 52%. The best CAGR was an eye-popping 235%, for the period from June 18, 2012, to June 18, 2016. The ten-year CAGR for bitcoin is 146%, even with large 80%-90% drawdowns.
When looking at the adoption curve, it’s hard to argue we are not still in the early innings for bitcoin. Recently the first bitcoin futures ETF was just launched, and the Houston Firefighters Pension Fund became the first public pension plan in the U.S. to invest in digital assets. As adoption accelerates, I fully expect that CAGRs will start to compress and decline.
Let’s assume that the following ten-year CAGR will be the worst dollar-cost averaging CAGR we’ve seen, which is 48%. That’s a 67% reduction from the previous ten-year CAGR of 146% – which is not an unrealistic expectation. Why, you might ask? Bitcoin is a fixed-supply asset – the only way to reflect demand is through the price.
Today, there are six publicly traded bitcoin mining companies all holding bitcoin they mine –that’s the only way for new bitcoin to be created – and raising inexpensive debt to allow them not to sell to finance operations. Business-intelligence software company MicroStrategy holds over 114,000 bitcoin. El Salvador has adopted a bitcoin standard. All of these developments did not happen in the last ten years, and retail ownership and demand is continuing to increase. The CAGR of Bitcoin may reduce, but demand is increasing and supply of liquid Bitcoin for sale is decreasing. (One easy way to track liquid supply is via Glassnode.)
Here’s a scenario: What would it look like for someone to take a 2.5% allocation in bitcoin with a hypothetical $500,000 portfolio, then dollar-cost average at $280 per month? What impact does this have on wealth over time, and is the risk worth the reward?
Under this scenario, you’d have the client save $33,600 over the next ten years, and that initial $12,500 investment would grow to be $2,181,625. Is that risking too much of the portfolio at 2.5%? Is $3,360 per year asking too much to save for someone with a $500,000 portfolio? You could likely fund the bitcoin dollar-cost averaging strategy with the income from that traditional portfolio. In my opinion, this is highly doable for most clients, and provides an outcome all of the clients I’ve talked with would embrace.
And what if you instead stick to what we’ve seen work – the S&P 500? If you did the same thing, you’d end up at the end of the decade with $136,654. (That’s at a CAGR of 15.30%, one of the highest over the last 100 years.) This begs the question of whether that’s sustainable – and that should be questioned, as the S&P 500 is arguably overvalued. (One could look at the price to earnings, price to sales, U.S. market value divided by GDP, or CAPE Ratio, for instance.) It’s hard outside of an interest rate model to find a valuation metric on which the U.S. stock market is not flashing red. The opportunity cost to not allocate to bitcoin looks massive when compared to the U.S. stock market.
Your clients are looking to you for answers, including how they can maintain purchasing power with market uncertainty. You understand the merits of diversification and its impacts on portfolio construction; think of how your clients are saving as well. Consider starting a dollar-cost averaging strategy for your clients.
As the data shows, you don’t need to be perfect in selecting when to start, or whether you choose daily, weekly or monthly. The act of saving in bitcoin changes the impact those funds can have over time. The result might be that clients have the option to retire sooner – based on your saving recommendations.
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Polygon Reveals Details About Its Future Collaboration With LBank During AMA – Press release Bitcoin News – Bitcoin News

PRESS RELEASE. Recently, LBank Exchange held an AMA session with the Polygon team, discussing Polygon’s achievements, collaborations, NFT and Gaming markets, Nightfall solution, future plans and so on. Here’s the summary of this AMA.
Ethereum is the blockchain development platform of choice, but it has limitations such as low throughput, poor UX, and no sovereignty. As a protocol and a framework for building and connecting Ethereum-compatible blockchain networks, Polygon breaks through these limitations by aggregating scalable solutions on Ethereum and supporting a multi-chain Ethereum ecosystem.
Polygon Outperforms Ethereum In-terms Of Active Users
As a layer 2 solutions aggregator built on top of Ethereum, Polygon has made some great achievements since its birth, its POS chain has over 2000 DApps live and processes over 7 million transactions daily. In fact, Polygon now has more daily active users than Ethereum.
MATIC, the token for the polygon network, is already live on trading platforms like LBank Exchange, and currently the trading volume of it is over 1 billion across exchanges. Polygon team is aiming to make more people hold MATIC tokens, and it’s hoping to see MATIC’s trading volume on LBank Exchange continue to grow as well.
Expanding the Polygon ecosystem
With the power to bring thousands of new users into blockchain, NFT and Gaming markets are strategic sectors that Polygon continues to focus on. There are already some of the largest gaming projects live on Polygon, such as Decentral Games, Sandbox, Somnium Space, Vulcan Verse, etc. As for NFT projects, there are OpenSea, Lazy.com, Autograph, etc.
The team will be bringing many more such games and NFT projects onto Polygon so that its community can enjoy more artwork and fun. In addition, Polygon allows for massive scalability, and compared to Ethereum, minting costs on Polygon are 100,000 times cheaper on average.
Polygon also has products designed for enterprise customers who need privacy and scalability, such as Nightfall, a one-of-a-kind, privacy-focused Rollup that combines Optimistic Rollups with Zero-Knowledge (ZK) cryptography commonly used in ZK Rollups. It creates a scalable and private hybrid of the two popular technologies.
Polygon Nightfall has the power to bring many large enterprises into blockchain, the team believes that it will lead to a large number of transactions on Polygon and further add new projects and users to the Polygon ecosystem.
Big Plans Ahead
The Polygon team has already got some big plans ahead. On the technical side, Polygon is investing heavily into ZK and ZK Rollup technology, for example, the team has already spent $250 million on acquiring Hermez, which is a decentralized, open-source ZK Rollup optimized for secure, low-cost and usable token transfers on the wings of Ethereum.
Polygon has also acquired another 4 teams to build more ZK Rollup chains, to achieve the goal of building highly scalable EVM enabled ZK Rollup technology. In addition, Polygon has updates coming for its POS chain and details on EIP 1559 implementation.
On the business side, Polygon has many exciting updates as well, with lots of big DApps and integrations planned. Significantly, Arjun, Polygon’s Head of Growth, points out that LBank is enhancing its global branding. He also assures that the love of the community makes the team achieve its goals, so it will continue to collaborate with LBank Exchange to bring more Polygon projects and tokens to the community. Polygon team will keep posting on its official social media accounts such as Twitter to reveal more details about future plans and latest updates.
About Polygon
Polygon is a layer 2 aggregating scalable solution on Ethereum that supports a multi-chain Ethereum ecosystem. The platform resolves the blockchain challenges like high gas fees, slow speed without sacrificing security. It is a protocol and framework to build and connect Ethereum-compatible blockchains.
Visit to Know more:
Website: https://polygon.technology/
Twitter: https://twitter.com/0xPolygon
Telegram: https://t.me/polygonofficial
Discord: https://discord.com/invite/polygon
About LBank
LBank is an ever-growing crypto trading platform which offers safe trading for the users worldwide. The team aspires to build the professional integration services for crypto-assets being a convenient trading platform. It has become popular with over 6.4 million users around the world.
Visit to Know More:
Website: https://www.lbank.info/
Twitter: https://twitter.com/LBank_Exchange
Telegram: https://t.me/LBank_en
LinkedIn: https://www.linkedin.com/company/lbank
Facebook: https://www.facebook.com/LBank.info/
This is a press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Up to 12 Million Iranians Own Cryptocurrency, Traders Choose Local Exchanges
Cryptocurrencies are a popular investment among Iranians and estimates suggest that the number of those who already own one coin or another may be as high as 12 million. The majority of Iranian traders prefer the services of local crypto … read more.
Check all the news here
Up to 12 Million Iranians Own Cryptocurrency, Traders Choose Local Exchanges
Cryptocurrencies are a popular investment among Iranians and estimates suggest that the number of those who already own one coin or another may be as high as 12 million. The majority of Iranian traders prefer the services of local crypto … read more.
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‘Trillions Of Dollars’—Bitcoin Braced For A Massive Earthquake As The Price Of Ethereum, Binance’s BNB, Solana, Cardano And XRP Soar – Forbes

Bitcoin and cryptocurrency prices have rocketed over the last month, with the combined crypto market surging towards $3 trillion as ethereum, Binance’s BNB, solana, cardano and XRP make double-digit percentage gains.
Subscribe now to Forbes’ CryptoAsset & Blockchain Advisor and discover hot new NFT and crypto blockbusters poised for 1,000% gains
The bitcoin price has climbed from around $45,000 per bitcoin in early October to all-time highs of $67,000 late last month, in part due to the launch of the first U.S. bitcoin futures exchange-traded funds (ETFs). Bitcoin has recently dropped back—despite huge new price targets even as ethereum and its smaller rivals hit fresh highs.
Now, Michael Saylor, a bullish bitcoin buyer, has predicted “trillions of dollars” will flow into bitcoin once the U.S. regulator approves a fully-fledged bitcoin ETF—helping bitcoin to replace gold and become the primary asset index for the Western world.
Sign up now for the free CryptoCodex—A daily newsletter for the crypto-curious. Helping you understand the world of bitcoin and crypto, every weekday
The bitcoin price has surged through 2021 but much of the crypto market’s gains have come from … [+]
“To do that, you need the spot ETF,” said Saylor, the chief executive of business intelligence software company MicroStrategy, speaking this week at Bloomberg‘s Financial Innovation Summit. “And once these spot ETFs roll, I think you’ll see billions, then tens of billions, then hundreds of billions, then trillions of dollars flow into them.”
Over the last year, Saylor has pivoted Microstrategy to a bitcoin acquisition vehicle, buying more than 110,000 bitcoins. The value of the company’s bitcoin holdings is around $7 billion, making up almost all of MicroStrategy’s $8 billion market capitalization.
Saylor said he expects a U.S.-based spot bitcoin ETF would act as an institutional on-ramp for investors who want bitcoin exposure, adding he’ll continue buying bitcoin via MicroStrategy. Such funds are already live in other countries, including Canada.
The launch of two U.S. bitcoin futures ETFs in October generated huge media attention, with the ProShares Bitcoin Strategy ETF accumulating more than $1 billion in assets in mere days. However, some, including general partner at Castle Island Ventures Nic Carter, have called futures-based ETFs “inferior” as they don’t give direct exposure to the underlying asset. Carter, speaking alongside Saylor, said a spot bitcoin ETF would be “the hottest commodity ETF launch of all time.”
“The right answer is: let investors buy a trillion dollars worth of bitcoin via an ETF because the ETFs plug into the existing security structure, the existing prime brokerages, the existing collateral packages,” said Saylor.
CryptoCodex—A free, daily newsletter for the crypto-curious
The bitcoin price has risen more than 300% over the last 12 months, making bitcoin a $1 trillion … [+]
Meanwhile, bullish bitcoin and crypto market watchers continue to predict prices will surge into the end of 2021. While bitcoin has lost ground this week, ethereum has added almost 5%, with its too biggest rivals, Binance’s BNB and solana, both surging by around 20%.
“Intraday volatility is completely normal after such a bullish month, but the higher time frame is looking solid for now,” Lukas Enzersdorfer-Konrad, chief product officer at Vienna-based bitcoin and crypto trading platform Bitpanda, said in emailed comments. “The crypto market is more integrated into the world economy every day which only shows how important it is for bigger institutions but on the other hand, is also under pressure from macro events.”
“A melt-up in bitcoin and ethereum into year-end is likelier than retracement, we believe, after 2021 corrections cleansed speculative positions, and with increasing demand and adoption, and declining supply, sustaining a bull market,” Bloomberg Intelligence senior commodity strategist Mike McGlone wrote in his latest market report, pointing to a “tidal wave of U.S. ETFs.”
“The startup of U.S. ETFs and the fact that cryptos counter China bans limit downside risks.”
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XRP Set for Massive Breakout With Altcoins Poised to Steal the Show From Bitcoin, Predicts Top Crypto Analyst – The Daily Hodl

One closely followed crypto analyst is bullish on XRP and thinks that altcoins are in a prime position to outpace Bitcoin (BTC).
The pseudonymous analyst known as Credible Crypto tells his 257,400 Twitter followers that XRP’s price structure looks very similar to data-sharing protocol OriginTrail, whose native token TRAC just rallied more than 300% following its recent listing on Coinbase Pro.
He expects XRP to follow a similar path to TRAC, taking the cryptocurrency back to its previous all-time high of $3.40.
“The XRP chart below is from my last YouTube video on XRP made in August. The chart next to it is another coin that I came across today that has the same structure but is one step ahead with the 5th wave already in progress. Do you see it now?”
After Ethereum’s new breakout against Bitcoin (ETH/BTC), the trader anticipates ETH’s next leg up to kick off a new alt season.
He also notes that Bitcoin dominance has likely already topped out, further paving the way for an altcoin rally.
“ETH/BTC broke out today, closing above the key resistance zone I was watching. This is a great sign and indicates BTC dominance may have already found its top and alts may be about to steal the show, led by ETH.”
The analyst says that Bitcoin dominance dropping doesn’t necessarily mean that BTC’s price will drop.
No it just means that if BTC is rising alts will probably rise faster. We saw this in 2017 in the latter stages of the bull run as lots of new money started pouring in.
— CrediBULL Crypto (@CredibleCrypto) November 3, 2021
Taking a closer look at the top crypto asset, Credible says that Bitcoin is close to deciding whether it wants to break to the upside or continue ranging.
According to his analysis, a rejection of $63,000-$64,000 could take BTC back to major support around $58.000.
“63-64k tagged BTC. Now to see if we break out to new ATH [all-time high] or reject soon and continue to range.”
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