Quick preface: All the dollar figures are unfortunately in canadian dollars unless specified otherwise. Also this is actually day #99 on the charts because my days are 0-indexed.So a hundred days ago I decided to buy ETH at $20 every single day to see what would happen and if this Dollar Cost Averaging strategy actually works, and I fell in love with it haha.It's kind of a lot and adds up real fast ($140 weekly, ~$600 monthly, $7300 yearly) but overall it's still a reasonable percentage of my income and I'm used to it now. I already made a thread about this a while back when I broke even at around 60 days and figure every 100 days is a good milestone to update for whoever wants to hear (Or now that I've typed it all out, maybe my next update will be at 500 days cause that's a lot of typing damn)The TL;DR results for these 100 days are (if you don't want to read the whole thing that's fine but make sure your question isn't addressed by the FAQ below, I got the same questions a hundred times last time I made a post about this)Total spent: $2000Total ETH bought: 0.6601 ETHTotal ETH value now: $2700 (+35%)Average price: $3030 (or $2400 USD)Best buy: 0.00907 ETH on 2021-06-26 which is now worth $37 (look at me I bought the very bottom of the dip!)My goal is to let the automated buys do their things for at least 4 years, so 365 x 4 + 1 leap day = 1461 days which I round up to an even 1500. This means I'll have spent $30k in ETH which is like... damn. Where will ETH be in 4 years and how much will that $30k be worth by then? So yeah I have my eyes on June 28th 2025 and I'm already 1/15th of the way there!My ultimate end goal is financial independance through staking/DeFi rewards. Probably not achievable in 4 years (unless my boy SquishChaos is right). Still, I'm running simulations all the time (to daydream and waste time at the fiat mine) and the bare minimum (where ETH/Crypto didn't go to $0) still nets me a pretty nifty sum in 4 years so I think my odds are good. It'd be cool to never have to sell ETH and keep borrowing against it while the collateral appreciates.I also like to make as many graphs as I can, using hourly prices:Paid vs value over timeBalance over time as price goes up, the line gets less steep which sucks when my goal is to accumulate as much ETH as possible, but also a less steep line means more gainsAverage price vs actual price over timeHow much ETH each day's $20 got me — More during dips and less during peaks. I do miss waking up to 0.008 buys lol, now I'm lucky to get 0.005ROI on every buy — Still at a "loss" on some of the past two weeks' buys because of this crab season but it's fine lolAlso setting expectations high I know — just let me dream please — but a logarithmic graph over the whole 1500 days, hoping the next big bull runs will make that orange line shoot way up as the blue line tapers off as it approaches $30k. But I'd need an overall return of x33.3 to hit $1M with this DCA strategy alone, so that will probably take me longer than 4 years. We'll see...I like this dollar cost averaging strategy because I no longer stress about timing my buys or dumping hundreds of dollars during a dip and then feeling stupid the next day when it dips more meaning I could have more ETH for the same price. Or thinking it'll dip more and then it goes up and I miss out. Instead I get the average daily price over the whole period I'm doing this. But of course I'll also buy large dips when it feels reasonable to do so, as any extra ETH brings me closer to my goal.So like basically what happens is:Price goes up: "Yay look at all those gains"Price goes down: "Awesome, my $20 will buy more ETH tomorrow morning"The average price gets more and more "settled" each day and over time it'll be harder and harder to make it move which I find pretty cool.When prices dip, the daily buy props that value sideways instead of down (unless it's a big dip) and when it goes up, the value shoots way up because every day brings a new $20 to do its thing. See this annotated graph for a rough idea of how price movement affect the orange line. I'm aware that this effect won't keep up as much once I have more and more money and that daily $20 represents a smaller and smaller percentage, but it was very motivating early on especially as I was in the red a lot. Big dips in price made my graph go sideways instead of down, and increases made it shoot way up. Now in this crab season the price isn't moving as much so the orange line as roughly the same $20/day increase as the blue line.No need to stress about timing large buys.Cool graphs every day, I look at them more than actual price charts.If I suddenly need money, I can just stop buying for a while instead of selling (assuming I still have a job and steady income) but I'm personalfinancing everything so I still relunctantly have an emergency fund for these things instead of dumping it all in crypto. And also I like this DCA experiment too much to mess with it, I'd rather stop investing in my traditional retirement accounts before stopping these daily crypto buys lol.Frequently Asked Questions:Don't you get killed by exchange fees for all these small trades? No, the exchange I use makes their money through a buy/sell spread instead of a flat fee per trade. So I buy my ETH at a slightly higher than market price. So in the end it doesn't matter if I buy $10 ten times or $100 once, I'll still pay the same fee through that spread. The spread is kinda high but I'm happy to pay it for that convenience. Plus they have this gimmick where every day I can get some free satoshis and I've done the math to figure out those daily free satoshis are worth more than what I pay through the spread lolWhat about Ethereum gas fees? They don't come into play. I let my ETH accumulate on my exchange and every month or so I'll send it to my hardware wallet. Plus the exchange is cool, they cover the gas fees as long as I meet the minimum withdrawal amount (currently 0.05 ETH, used to be 0.10) so I don't even have to worry about those!Why DCA daily instead of weekly or monthly? It's more fun, and my exchange app lets me automate it, so why not. In the long run it doesn't matter if you go daily or weekly, I've ran simulations for fun and they all average to roughly the same result. There's always the risk that your monthly buy happens at a short term peak and nets you less ETH for the same price, but that risk gets smoothed out over time.How do you automate it? My bank lets me setup an automatic biweekly e-transfer (Interac) of $300 every payday to the app, and from inside the app I set up a recurring buy for $20 every day at 6 AM. This also leaves me with an extra $20 every 2 weeks that I let accumulate until I see I dip and buy it without remorse but it's not much.Isn't this a recipe for a tax nightmare? Probably yeah but that's a problem for my future self to deal with lol. I don't plan on selling for a while, but when I do, I can generate a CSV detailing each transaction I made with the price at the time of purchase and everything. From there I hear there's even crypto tax calculators that accept that CSV to calculate how much capital gains I'll have to report but I haven't explored those options too much. All I need to know right now is that my 2021 tax return will be simple enough to do by hand.How do you generate those cool graphs? I take the transaction history CSV provided by my exchange and I made a script that parses it and fetches hourly prices and generate data that I can just paste into Excel and make those graphs. Basically I just need the hourly prices and how much ETH i bought to calculate the balance over time to multiply it by the price at each hour. Excel is kinda lame though but it's what I know. I'm hoping to fully automate data fetching and chart generation at some point in the future.So what's this exchange app you're using? It's called Shakepay and it's for Canadians only, sorry. If you're interested DM me for a referal code that'll get us both $10 cash on your first buy over $100 and it'll also let you shake your phone every day for those free satoshis I talked about. I don't want to shill (plus any canadian interested in crypto has probably heard of it anyway) but I'm happy with it, it's a simple app that gets straight to the point of buying crypto. But yeah other than that, basically anything that works with a buy/sell spread and lets you automate buys should be good to do this.
Submitted August 28, 2021 at 07:54PM
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