Investing a fixed amount in Bitcoin (CRYPTO: BTC) on a monthly basis has historically outperformed the strategy of perfectly timing market cycle bottoms, according to an analysis by crypto commentator Lark Davis. The comparison highlights the potential benefits of dollar-cost averaging (DCA) over attempting to buy at the lowest possible prices during market dips.

Davis evaluated two hypothetical investment strategies using a total capital of approximately $20,000. The first strategy involved purchasing one Bitcoin at each of four major cycle lows: about $2 in 2011, roughly $200 in 2015, around $3,200 in 2018, and around $16,000 in 2022. This approach accumulated a total of four Bitcoin. With Bitcoin trading near $63,000, these holdings would be worth about $252,000, representing an approximate 13x return. At Bitcoin’s theoretical 2025 peak near $126,000, the position would have been valued at approximately $504,000.

In contrast, spreading the same $20,000 across monthly Bitcoin purchases from late 2011 through July 2026 would have accumulated approximately 10 BTC. At current prices near $63,000, this position would be worth about $630,000. This result substantially outperforms the theoretically perfect cycle-bottom strategy, demonstrating the efficacy of consistent investment over market timing.

Comparison of Investment Strategies

Davis also examined a shorter timeframe starting from the 2018 cycle bottom. Investing $10,000 at the 2018 low near $3,200 and another $10,000 at the 2022 low near $16,000 would have accumulated approximately 3.75 BTC. These findings challenge the notion that investors must wait for specific price levels, such as $40,000, before deploying capital. Waiting for $40,000 would allow an investor with $20,000 to purchase 0.5 BTC, compared to approximately 0.317 BTC at $63,000. However, this strategy relies on the asset reaching the lower target and the investor maintaining the conviction to buy during periods of negative market sentiment.

"If $40,000 never arrives, you’ve held cash through a rally while waiting for an entry that never came," Davis noted. Using an assumed 30% compound annual growth rate over the next decade, Davis estimated Bitcoin could reach approximately $868,500 by July 2036. Under this scenario, investing $20,000 at $63,000 would grow to roughly $275,000, while investing the same amount at $40,000 would grow to approximately $434,000.

Cryptocurrency analyst Michaël van de Poppe identified a buying opportunity for Strategy Inc. and Bitcoin, citing depressed valuation metrics reminiscent of the 2022 bear market bottom. The analyst highlighted that Strategy’s Market Net Asset Value (mNAV) is currently in the bottom 1% of historical readings, suggesting the stock is trading at a significant discount to its Bitcoin holdings. Market Net Asset Value is calculated by dividing Strategy’s Enterprise Value by the total market value of the Bitcoin it holds, tracking whether investors pay a premium or a discount for the treasury.

Van de Poppe noted that while Strategy’s share price has fallen, it has not reached the depths seen in 2022, arguing that the company has strengthened its position since then. He interprets the current setup as temporary, suggesting the market may be nearing a bottom for Bitcoin. This outlook contrasts with recent criticism regarding Strategy’s shift from being a buyer to a seller of Bitcoin to fund operations, a move that has pressured investor sentiment and challenged the company’s previous “never sell” thesis.

Michael Saylor, co-founder of Strategy, posted a chart on X featuring orange circles to pinpoint the firm’s Bitcoin purchases, stating that “orange dots tell only part of the story.” Historically, these weekend posts have preceded purchase disclosures on the following Monday, hinting at potential accumulation. The analyst comments and Saylor’s post come as Strategy sits on unrealized losses worth over $10 billion on its Bitcoin holdings.

At the time of writing, Bitcoin was exchanging hands at $62,698.35, down 1.96% over the last 24 hours. Strategy shares closed 0.80% higher at $94.64 on Friday. Benzinga’s Edge Stock Rankings indicate that MSTR has underperformed with a weaker price trend across short-, medium-, and long-term timeframes.