The global cryptocurrency market cap has dropped below $1 trillion—down over 70% from its all-time high of $2.9 trillion. While this signals the onset of a new bear market, it also presents a strategic window for investors to accumulate digital assets at significant discounts compared to their peak prices.
Historically, major bull runs have followed Bitcoin’s halving events, often beginning several months afterward. With the next halving anticipated around March 2024, now is the ideal time to refine your investment strategy. But should you use dollar-cost averaging (DCA) or attempt to time the market?
To answer this, I analyzed historical data from previous cycles—specifically the 2017 bull run, the 2018–2020 bear market, and the 2021 rally—to uncover which approach delivers superior returns while managing risk.
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Understanding Dollar-Cost Averaging (DCA) in Crypto
Dollar-cost averaging involves investing a fixed amount at regular intervals, regardless of market conditions. This method reduces the impact of volatility by spreading purchases over time.
To test DCA’s effectiveness, I compiled weekly market cap data for the top 1,000 cryptocurrencies from December 17, 2017—the day Bitcoin hit $19,700—to December 5, 2021. Despite CoinMarketCap’s $3,000 API fee, I manually collected this data over two weeks to ensure accuracy.
Over this 208-week period, I simulated investing $1 million via weekly DCA into four groups:
- Top 100 cryptos
- Top 250 cryptos
- Top 500 cryptos
- Top 1,000 cryptos
Each week required an investment of $4,807.69 ($1M ÷ 208 weeks).
DCA Results: Which Portfolio Performed Best?
Here’s what the numbers revealed:
- Top 500 cryptos: Generated a 558% return, turning $1M into **$6,584,930**
- Top 1,000 cryptos: Delivered 352%, growing capital to $4,524,449
- Top 250 cryptos: Achieved 345%, ending with $4,446,198
- Top 100 cryptos: Returned 298%, resulting in $3,980,566
Surprisingly, broader diversification paid off—especially within the top 500. Even more impressive? These returns started from one of the worst possible entry points: the peak of the 2017 bull market.
Imagine starting your DCA strategy today—when the market is already down ~66% from its all-time high. Your potential gains could far exceed these historical figures.
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Can You Time the Crypto Market?
Market timing means investing a lump sum at what you believe is an optimal moment—typically after a major dip. While tempting, it’s notoriously difficult to execute consistently.
Still, let’s explore hypothetical scenarios based on key historical dates.
Scenario 1: Investing One Year After the 2017 Peak
Bitcoin had fallen ~87% by December 17, 2018. Had you invested $1M then:
- Top 1,000 cryptos: 681% return
- Top 500 cryptos: 1,105% return
- Top 250 cryptos: 751% return
- Top 100 cryptos: 864% return
Such high returns reflect deep undervaluation during that period—proof that well-timed entries can outperform DCA.
Scenario 2: One Year Before the 2020 Halving (May 2019)
Investing on May 11, 2019:
- Top 1,000 cryptos: 388% return
- Top 500 cryptos: 593% return
- Top 250 cryptos: 409% return
- Top 100 cryptos: 460% return
Solid performance, though less explosive than post-crash entries.
Scenario 3: Immediately After the 2020 Halving
On May 17, 2020—just after the halving—the rally was already underway. Still, returns were staggering:
- Top 1,000 cryptos: 1,231% return
- Top 500 cryptos: 2,087% return (over 20x!)
- Top 250 cryptos: 791% return
- Top 100 cryptos: 585% return
The top 500 basket nearly turned $1M into $22M—an extraordinary outcome driven by early participation in DeFi and altcoin momentum.
Key Takeaways: Strategy Meets Reality
While perfect market timing can yield higher returns, it requires precise foresight—something even experts lack. The risk of mistiming is high; entering too early or too late can drastically reduce gains.
In contrast, dollar-cost averaging removes emotional decision-making and systematically builds exposure during downturns. It’s especially powerful in bear markets when prices are depressed.
Given that we’re likely in a pre-halving bear phase (as of early 2025), now is an optimal time to begin a disciplined DCA plan.
I’ve chosen to implement DCA starting January 2023 and continuing through March 2024—aligning my buy-ins with the expected Bitcoin halving cycle.
Frequently Asked Questions (FAQ)
Q: Is dollar-cost averaging better than lump-sum investing in crypto?
A: In volatile markets like crypto, DCA reduces risk and smooths entry prices. While lump-sum investing can yield higher returns if timed correctly, it carries greater downside risk. For most investors, DCA is safer and more sustainable.
Q: Should I invest in top 10, top 100, or top 500 cryptocurrencies?
A: Historical data shows that diversified baskets like the top 500 outperformed narrower portfolios during bull runs. However, higher-ranked assets (e.g., top 10) offer more stability. A balanced approach—allocating core funds to top-tier assets and satellite positions to mid-caps—may optimize risk-adjusted returns.
Q: When is the best time to start DCA in a bear market?
A: The earlier you start during a bear phase—especially after a significant drawdown—the better your long-term results tend to be. Since timing the exact bottom is impossible, beginning DCA as soon as a downtrend is confirmed maximizes your average cost advantage.
Q: Does DCA work if I start at the market peak?
A: Yes. Our analysis shows that even starting DCA at Bitcoin’s 2017 all-time high still delivered nearly 3x returns over four years. This resilience makes DCA one of the most reliable strategies for long-term investors.
Q: How often should I DCA into crypto?
A: Weekly or bi-weekly intervals are common and effective. They provide sufficient frequency to average out price swings without overcomplicating execution. Automated platforms can help maintain consistency.
Q: What role does Bitcoin halving play in market cycles?
A: Historically, halvings reduce new supply issuance, creating scarcity. Major bull markets have followed each halving event by 6–18 months. The next halving (expected early 2024) may catalyze the next upward cycle.
Final Thoughts: Prepare Now for the Next Bull Run
Bear markets test investor conviction—but they also lay the foundation for future wealth creation. Whether you choose dollar-cost averaging or attempt strategic timing, data suggests that consistent participation in quality crypto assets yields strong long-term results.
For most people, a systematic DCA strategy across a diversified set of established projects offers the best balance of growth potential and risk management.
As we approach the post-halving phase in early 2025, positioning yourself now—before sentiment shifts—could define your financial trajectory for years to come.
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