10x Research: Bitcoin Dollar-Cost Averaging Strategy May Have Lost Effectiveness, Dynamic Allocation Based on Market Cycles Performs Better

Odaily reported that 10x Research posted on X, stating that as Bitcoin gradually evolves into a trillion-dollar asset, its return characteristics have shifted from early exponential growth to more pronounced cyclical fluctuations. The effectiveness of the traditional "Dollar-Cost Averaging (DCA)" strategy is diminishing. Over the past five years, although Bitcoin has experienced significant volatility, its overall incremental returns have been limited. Passive holding strategies have faced multiple drawdowns with mismatched long-term returns, whereas dynamic allocation strategies based on market cycles have performed better. This difference primarily stems from dynamic allocation's ability to avoid significant drawdowns during structural bear markets and re-enter the market when conditions improve.

In the current market environment characterized by increased volatility, risk management itself is a source of excess returns. A cycle-based allocation framework helps investors protect capital during bear markets and participate opportunistically when the probability of success increases.