The #Bitcoin DCA Tower 🗼
Dollar-cost averaging is a common strategy for accumulating Bitcoin, involving regular purchases of a fixed dollar amount (e.g., weekly or monthly).
Bitcoin's price rises nonlinearly over time (power law), while DCA capital flow increases linearly. Simple math shows an upper limit to the Bitcoin you can accumulate, depending on two factors: 1) the DCA amount and 2) the start time.
I created a 3D surface plot with contours showing the maximum Bitcoin stack vs. DCA amount and start date. It highlights the challenge of achieving a specific stack, especially when starting later, as slopes steepen significantly along the time axis at higher Bitcoin values.
The chart is interactive; explore it on my website, where I also explain how I derived it: https://metashwin.com/posts/most-bitcoin-owned/#the-maximum-bitcoin-contours
https://blossom.primal.net/8349189f2fa15db53504033c5dae767a30e4faa8cf78b630e30cce01544f0c6b.mov
The Bitcoin DCA Tower helps you estimate the monthly savings needed to reach a target Bitcoin stack. It also highlights the penalty for starting late, as the DCA amount required to accumulate the same Bitcoin rapidly increases over time.
If you've seen Smitty's (@sminston_with) excellent retirement guide, you know the amount needed to retire on Bitcoin. If you combine the two charts, you essentially have your very own Bitcoin-powered pension scheme!
Like and follow if you want more of such content.
Last but not least, do your own research; don't simply take my word for it. #NFA
I am building a solo Bitcoin research project. Check out the introductory article below and my website https://metashwin.com.
Follow me to learn how to value Bitcoin through a scientific lens and explore innovative asset management strategies.
LFG! 🚀
nostr:naddr1qvzqqqr4gupzqhhvk4kh9zpjkpzjyl8dwe825z462e745chmehkpnf34r56zl7qaqyfhwumn8ghj7ur4wfcxcetsv9njuetn9uq3wamnwvaz7tmjv4kxz7fwwpexjmtpdshxuet59uqz7mte944x7atjdejhjtthd96xsttzd96xxmmfdckkyatfd3jxjmn894sj6mn9wukkzurswfhkzcmgqsv942
Test 3.
The minimum Cost of Production Price of #Bitcoin
1/
Summary: I present a bitcoin price indicator based on cost of production. It is constructed from hash, issuance and energy efficiency data that is available in the open. Only electricity price is (additionally) assumed. The indicator provides a potential alternative to the power law for estimating the fair value price of bitcoin.
The current network hash rate of bitcoin is a whopping 650EH/s! Thats about 650000000000000000000 SHA256 int32 operations per second! This spectacular feat was achieved through the combined effort of a network of miners spread across the world. This has brought tremendous value to bitcoin by making it the most secure ledger ever created.
At present, the cost of this global operation is paid for mainly by the block subsidy (i.e. by newly created bitcoin). One can express the relation between the total hash and the cost of producing it by a simple formula:
Hash = Efficiency . (breakeven) Price . Revenue (in BTC).
or,
H = E.P.R
Here, the breakeven price of bitcoin is the price at which mining is just profitable. Henceforth, I refer to this as the (minimum) Cost of Production or CoP Price. Efficiency (or dollar price of hash) represents the amount of hash that the network can produce per dollar of cash spent.
Since H, E and R can be determined independently, the above formula can be used to estimate CoP price:
CoP Price = H / (ER)
Related work/Further reading:
[1]. https://x.com/IIICapital/status/1547953224555999233
@IIICapital
[2]. https://medium.com/@paulewaulpaul/bitcoin-difficulty-per-issuance-a-pow-pricing-model-452cd8a3017b
@paulewaulpaul
[3]. https://x.com/moneyordebt/status/1814322194354471081 by
@moneyordebt
for more insight.
Hello world!