Why does dollar-cost averaging enable you to seize Bitcoin's long-term dividends?

Entry timing can affect the level of returns, but long-term holding is the key to determining the size of gains.

Written by: Cointelegraph

Translated by: AididiaoJP, Foresight News

Backtesting data and forward-looking models both indicate that dollar-cost averaging (DCA) is the best way to invest in Bitcoin. Will this method still work in the next bull market?

Over the past five months, Bitcoin has experienced a 50% decline. Smart investors adjust their strategies during bear markets and corrections. This strategy is called dollar-cost averaging (DCA), which involves regularly investing a fixed amount regardless of market conditions.

By analyzing historical market cycles and forward simulations of BTC prices, we can better understand how this steady investment approach performs at different entry times and investment periods.

Five-Year Bitcoin DCA Yields Substantial Returns

Starting in January 2021, investing $250 weekly in Bitcoin for five years, with a total investment of $67,500. According to DCA simulation data, this strategy acquired 1.65097905 BTC at an average buy-in price of $40,884.

At the current Bitcoin price near $71,000, these 1.65097905 BTC are worth about $120,500, yielding a profit of $53,000 (a 76% increase). When Bitcoin reaches $100,000, the holdings are worth approximately $165,000; and at the peak around October 2025 near $126,000, the holdings could be valued at $208,000.

Bitcoin DCA Cycle 2021-2026 Source: Newhedge

Let’s look at a shorter investment cycle to see how entry timing impacts early gains. Starting in January 2024, investing $250 weekly, with a total of $28,500, accumulating 0.36863166 BTC at an average buy-in price of $77,312.

At the current price of $71,000, these BTC are worth about $26,909, reflecting a 6% loss. When the price hits $100,000, the holdings are valued at $36,863; at the peak near $126,000, they could be worth $46,448.

In February this year, Swan Bitcoin analyst Adam Livingston compared the returns of weekly DCA into BTC versus the S&P 500 over the past five years on X platform. Investing $100 weekly, BTC ultimately yielded $42,508, while the S&P 500 returned $37,470, with respective returns of 62.9% and 43.6%.

Livingston pointed out that although Bitcoin’s price is volatile, historical data shows that sticking to DCA during downturns can lead to higher long-term gains.

Weekly $100 DCA into BTC vs. S&P 500 Source: Adam Livingston/X

Long-Term Model: Time Is Key

Forward-looking simulations also tested the effects of starting DCA in 2026. Beginning in January 2026, investing $250 weekly until March 2030, with a total of about $54,250.

Price forecasts are based on Bitcoin’s long-term power-law growth curve (tracking Bitcoin’s historical prices against time on a logarithmic scale). This model produces an upward support band and a median trend line, aligning well with previous market cycles.

Bitcoin Power-Law Growth Curve Source: Bitbo.io

According to this model, analysts estimate that by 2028, the long-term support level could break above $100,000, which forms the basis for future DCA modeling. Simulations by Bitcoin Well project a median price of about $430,000 by March 2030.

Considering possible deviations, the model also accounts for upper and lower bounds of the power-law channel, giving a lower estimate of around $274,000 and a higher estimate of about $900,000.

Based on these assumptions, four years of DCA could accumulate approximately 0.30 BTC:

• If BTC is $274,000, the holdings are worth about $82,200.
• If BTC is $430,000 (median estimate), the holdings are worth about $129,000.
• If BTC reaches $900,000, the holdings could be worth about $270,000.

DCA Investment Results as of March 2030 Source: Bitcoin Well

In November 2025, Bitcoin researcher Sminston With conducted a study using similar predictive models to test how entry timing affects long-term gains. The results showed that even if the purchase price is 20% higher than the then-$94,000 price, and the selling price is 20% below the predicted median 2035 price, the remaining holdings after ten years still gain nearly 300%.

In this simulation, the final assets are 7.7 times the initial investment.

The conclusion is that while entry timing influences returns, long-term holding is the key to maximizing gains.