DCA vs Taking Out a Loan to Buy Bitcoin: Data Analysis

TLDR: From 2017 to today, taking a loan (with a 10% interest rate) would have beaten a straightforward DCA strategy 65.5% of the time! 2 out of 3 times is pretty insane. I've noticed a ton of discussions to take out a loan to buy Bitcoin. I was thinking of doing it myself, but wanted to crunch the numbers behind it. So, here I am, to settle the debate. The results are not surprising at all: - Starting in Bull markets: DCA typically wins out. - Starting in Bear markets: Taking a loan to buy BTC significantly outperforms DCA Quick summary of the methodology: - Loan interest rate: 10% - Loan term: 5 years - Modeled like a mortgage: Each monthly payment accrues 1/60th of the BTC ownership - Upfront deposit of 20% (similar to a mortgage) - DCA strategy matches the same monthly payment + deposit amount in BTC purchases I'm planning to refine this further. let me know if you guys want to follow along: - Right now, I haven't even factored in the full upside potential you get from having immediate access to the entire BTC amount (only accounted for equity paid). Is that a better way to model this? Would love someone else's thoughts. - Considering turning this into a comprehensive tool or product. Do you think there's a demand or need for something like this? I'm thinking about a solution for this Would appreciate your thoughts, critiques, or any suggestions to improve this analysis! Cheers! submitted by /u/Main_Mouse442 [link] [comments]

Jun 27, 2025 - 12:08

DCA vs Taking Out a Loan to Buy Bitcoin: Data Analysis

TLDR: From 2017 to today, taking a loan (with a 10% interest rate) would have beaten a straightforward DCA strategy 65.5% of the time!
2 out of 3 times is pretty insane.

I've noticed a ton of discussions to take out a loan to buy Bitcoin. I was thinking of doing it myself, but wanted to crunch the numbers behind it. So, here I am, to settle the debate. The results are not surprising at all:
- Starting in Bull markets: DCA typically wins out.
- Starting in Bear markets: Taking a loan to buy BTC significantly outperforms DCA

Quick summary of the methodology:
- Loan interest rate: 10%
- Loan term: 5 years
- Modeled like a mortgage: Each monthly payment accrues 1/60th of the BTC ownership
- Upfront deposit of 20% (similar to a mortgage)
- DCA strategy matches the same monthly payment + deposit amount in BTC purchases

I'm planning to refine this further. let me know if you guys want to follow along:
- Right now, I haven't even factored in the full upside potential you get from having immediate access to the entire BTC amount (only accounted for equity paid). Is that a better way to model this? Would love someone else's thoughts.
- Considering turning this into a comprehensive tool or product. Do you think there's a demand or need for something like this? I'm thinking about a solution for this

Would appreciate your thoughts, critiques, or any suggestions to improve this analysis!
Cheers!

submitted by /u/Main_Mouse442
[link] [comments]