In the realm of both traditional and cryptocurrency markets, investors are continually testing various strategies to maximize their returns. While some prefer short-term investments, others opt for a long-term approach. Among the diverse strategies, Dollar Cost Averaging (DCA) has gained prominence, especially when applied to cryptocurrencies like SOL, DOGE, and SHIB. But what would the outcome have been for investors who adopted this strategy in the past?
DCA’s rising popularity among crypto investors has led to increased scrutiny of its effectiveness. This strategy, akin to saving money in a piggy bank, involves making regular, fixed-amount purchases of a cryptocurrency over time. By analyzing Solana (SOL), which has risen from the ashes to become highly popular, we can see that an investor who started with a 100 TL investment in January 2021 and continued with monthly purchases would have invested a total of 3600 TL to date.
Over a 36-month period, this modest investment in SOL would have grown to 36,000 TL, yielding a profit of 33,788 TL, which translates to a 938.57% return on investment. It’s important to note that despite SOL’s price dips at the end of 2022 and the beginning of 2023, the investment level remained low. However, on November 26, 2021, the profitability peaked at around 1500%, and a potential bull run could further multiply this investment.
On the other hand, Dogecoin (DOGE), despite its incredible surge thanks to Elon Musk’s support, followed by a significant drop, has provided less return compared to SOL. Over the same 36-month period, a monthly investment of 100 TL in DOGE would have only tripled, resulting in a total value of 10,819 TL.
Shiba Inu (SHIB) has outperformed its competitors, with an initial investment of 100 TL per month since February 2021 skyrocketing to unimaginable amounts. After 36 months, the portfolio saw a growth of 66,715%. Interestingly, the highest value of this investment was reached around October-November 2021, when a 1000 TL investment exceeded 80 million TL. Despite subsequent declines, the portfolio remained just over 24 million TL.
While Shiba Inu represents an extreme case, often seen in the wallets of early investors or team members who did not sell, finding similar high-growth altcoins is not always feasible for investors. Nevertheless, even with just these three altcoins, DCA has proven to be effective, offering return opportunities even without large investments.
However, it’s crucial to remember that many cryptocurrencies have disappointed investors in the past, and not all strategies yield positive results. Caution and due diligence remain essential in the volatile world of crypto investing.