Embracing Bitcoin in Uncertain Times: Dollar-Cost Averaging with a Twist

In the midst of the COVID-19 pandemic, a significant decision crystallized in my mind: to allocate a portion of my net worth to Bitcoin as a safeguard against the vulnerabilities of the traditional fiat system. This decision was not made lightly but was influenced by witnessing the economic turmoil in countries like Myanmar, Turkey, and Venezuela. These countries, each in their unique way, have suffered due to fragile monetary policies and management, highlighting the inherent risks of centralized financial systems.

The Flaw of Human Management in Monetary Systems

One fundamental belief that guided my decision is the conviction that monetary systems should not be at the mercy of management by a select few, no matter their intelligence or intentions. History has shown us that human imperfection and the possibility of mismanagement are inevitable. The central issue lies not solely in the unsound policies but in the very notion that such critical systems can be controlled by individuals whose decisions could lead to catastrophic consequences.

Setting a Goal: 10% Net Worth in Bitcoin

Driven by this belief, I set a seemingly arbitrary goal to allocate 10% of my net worth to Bitcoin. This journey saw me purchasing Bitcoin through the downturns, such as the FTX collapse, and the sideways market movements of 2022–2023. My strategy has been guided by the principle of dollar-cost averaging (DCA) with a twist – adjusting my buying pattern based on the relative size of my Bitcoin holdings to my overall net worth. This meant halting purchases when the value of my Bitcoin holdings soared above the 10% threshold and resuming when it dipped, ensuring a disciplined approach to investment without the need to sell any holdings.

The Flexibility of Non-Fiat Assets

As Bitcoin’s price neared $50,000, my purchases have paused for a while (last purchase was sub-$30,000), prompting a moment of reflection on whether my initial goal needs adjustment. Yet, there’s no urgency to make hasty decisions. This tranquility underscores the unique advantage of investing in non-fiat assets like Bitcoin. Unlike traditional investments, there’s no pressing need to chase yields or react swiftly to market fluctuations, allowing investors the luxury of patience and a long-term perspective.

Conclusion: A Calm Outlook

The journey of integrating Bitcoin into my financial portfolio through dollar-cost averaging has been more than just an investment strategy; it’s been a philosophical alignment with the belief in a decentralized, unmanaged financial system. This approach has not only provided a hedge against the instability of fiat currencies but has also offered peace of mind amidst global economic uncertainties. As I continue to observe the evolving landscape, the calmness afforded by my decision to invest in Bitcoin remains a constant, highlighting the beauty of diversification and the strategic patience in non-fiat asset management.

In embracing Bitcoin, I’ve navigated the complexities of modern finance with a strategy that balances discipline with flexibility, underscoring the potential of cryptocurrencies to serve as a viable alternative to traditional monetary systems.