## Bitcoin Five-Year Dollar-Cost Averaging Strategy: Why Is the Investment Return Only 3%?

Recently, gold advocate Peter Schiff's comments on social media have caused quite a stir in the financial circles. He pointed out that Strategy's approach of accumulating Bitcoin through dollar-cost averaging over the past five years has resulted in an annualized return of only 3%. This figure is truly astonishing—a cryptocurrency regarded as a future asset, yet its long-term returns are far below expectations.

Have you thought about this? Strategy's report shows the average purchase price of Bitcoin at $75,000, while the current Bitcoin price has already surpassed $95.33K. At first glance, this seems to yield a 16% profit, but when averaged over five years, the annualized return is minimal. What does this indicate? How the timing of entry and investment rhythm profoundly influence the final investment returns.

### Why hasn't the dollar-cost averaging strategy delivered the expected returns?

Strategy employs the dollar-cost averaging method, which involves investing a fixed amount at regular intervals regardless of price fluctuations. The original advantage of this approach is to avoid timing risks and to build wealth through disciplined accumulation to hedge against volatility. But the problem is—during these five years, as Bitcoin soared from lows to all-time highs and then retraced, the regular purchases kept happening near the high points.

To put it metaphorically: if you spend the same amount of money each month on groceries, and the prices keep rising, eventually, your average purchase price will be the most expensive. The same applies to Bitcoin. After Bitcoin hit over $90,000 in 2024 and then corrected, the average buy-in price for Strategy remained at $75,000—which is already quite high. In other words, it missed the opportunity to buy at lower prices and bought too much at the high levels.

### How did other assets perform during the same period?

Peter Schiff used Bitcoin as a comparison, implying that investing that money elsewhere might be more profitable. In fact, the performance of different assets over the past five years varies greatly:

**Gold** has steadily risen, serving as a traditional safe-haven asset with stable appreciation; **S&P 500** has shown compound growth, with fluctuations along the way but a long-term upward trend; **Real estate** has been highly segmented, with location and industry type playing significant roles; **Government bonds** offer predictable yields, but their attractiveness is influenced by interest rate cycles.

The key point is, a direct comparison requires considering the entry point and risk tolerance. If you had invested in gold or stocks in a lump sum five years ago, the return trajectory would be entirely different. Investment returns should never be judged solely by percentage; it also depends on whether you entered during a bull or bear market.

### Bitcoin’s volatility is a double-edged sword

Bitcoin’s high volatility has always been a defining feature. Under this characteristic, the timing of entry is amplified infinitely. If Strategy had started dollar-cost averaging at $20,000, the current returns would tell a different story. Conversely, if someone had gone all-in at the market top, they might have become a textbook case of being trapped.

This also explains why many conservative investors prefer assets with lower volatility—despite potentially lower returns, they can psychologically endure the fluctuations better. The advantage of dollar-cost averaging lies precisely here, but its cost is that during bull markets, the returns are diluted.

### Long-term perspective: is five years enough?

Here’s an often-overlooked angle—does five years count as long-term investing? Not really. Many professional financial planners recommend that for high-volatility assets like Bitcoin, at least a seven to ten-year horizon should be used for evaluation. Short-term performance often does not reflect long-term potential.

Looking at Bitcoin’s entire history since its inception, patient investors have generally achieved returns far exceeding the market average. But this logic may not apply to Strategy, because its entry price was not low enough to begin with.

### The underlying choices behind investment returns

This debate about investment returns fundamentally reflects differences in investment philosophy. Peter Schiff represents the skepticism of the traditional financial camp, while Bitcoin supporters emphasize decentralization, censorship resistance, and long-term scarcity—values that transcend price.

As an investor, you need to ask yourself: do you care about the percentage of short-term returns, or do you believe in Bitcoin’s future as a store of value? How much volatility can you tolerate, and what is your investment horizon? What is your asset allocation strategy?

### Other costs to consider

Don’t forget, the calculation of investment returns also hides many implicit costs: storage fees, transaction fees, tax burdens, security risks, etc. These factors, combined, further eat into the net returns. A comprehensive investment decision must include these considerations.

### Conclusion

Strategy’s 3% annualized return is indeed somewhat disappointing, but this is not a problem with Bitcoin itself, rather with the entry strategy and timing. The original intention of dollar-cost averaging is good, but the outcome depends on market evolution.

For most investors, the key is not blindly following trends or completely dismissing an asset, but making rational allocation decisions based on their risk tolerance, investment horizon, and financial goals. Bitcoin can be part of a portfolio, but should never be the whole—just like no single asset should dominate your holdings.