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Bitcoin Savings Strategies: Smash Buy vs. Dollar Cost Averaging
Now that you've set up your exchange account and made your first purchase, it's time to explore effective strategies for building your Bitcoin holdings over time.
This presentation will guide you through two primary approaches: 'Smash Buy' and 'Dollar Cost Averaging' (DCA). We'll cover how to implement each method using Strike as our example exchange, though the principles apply across most platforms.
Let's examine how these strategies work, their advantages and limitations, and how to choose the best approach for your financial goals.

by Don McAllister

Video Overview
Understanding Smash Buy vs. Dollar Cost Averaging
Two primary strategies exist for building your Bitcoin position. Each offers distinct advantages depending on your financial situation and risk tolerance.
Smash Buy Strategy
Purchasing a large amount of Bitcoin at once. Higher potential for both gains and losses. Requires significant initial capital but minimal ongoing attention.
Dollar Cost Averaging (DCA)
Purchasing fixed amounts at regular intervals regardless of price. Reduces impact of volatility through consistent purchases. Lower barrier to entry with smaller regular investments.
Understanding Smash Buy Strategy
What is Smash Buy?
A purchase strategy where you buy Bitcoin as a lump sum whenever you have funds available, regardless of market conditions. This approach is straightforward but exposes you to more short-term price volatility.
Benefits
Potential for quick gains if the market rises shortly after your purchase. Simpler to execute with fewer transactions to track. No waiting period—you acquire your Bitcoin immediately.
Limitations
Higher exposure to price volatility. Psychological pressure if prices drop after purchase. Requires more market timing decisions, which can be stressful for beginners.
The Smash Buy approach requires minimal planning but more attention to price movements. While it's technically simpler, it can be emotionally challenging as you witness the ups and downs of Bitcoin's price after making large purchases.
Smash Buy on Strike - Option 1 - Auto Buy
Setup Auto Buy on Strike
Set your Strike Account to auto buy bitcoin on receipt of cash.
Fund your Strike account
Transfer cash to your Strike account and let Strike auto buy bitcoin on receipt
Repeat as needed
Continue monitoring the market for future buying opportunities when you have additional funds.
This option does leave you open to potential issues if your cash transfer is held up for any reason and you miss a good buying opportunity!
Smash Buy on Strike - Option 2 - Manual Buy
Switch Off Auto Buy
Set your Strike Account not process cash on receipt and just leave in your Strike cash account
Fund your Strike account
Transfer cash to your Strike account in advance, ensuring funds are ready for immediate purchases.
Monitor market conditions
Watch Bitcoin price trends to identify potential buying opportunities.
Execute your purchase
When you decide the time is right, log in and convert your some or all of your cash to Bitcoin with a single transaction.
Repeat as needed
Continue monitoring the market for future buying opportunities when you have additional funds, or have a cash balance remaining in your Strike account
Pre-funding your Strike account is crucial for the Smash Buy approach. Having funds ready allows you to make immediate purchases when you spot favourable market conditions, avoiding delays from deposit processing or Financial Conduct Authority checks that might cause you to miss buying opportunities.
Understanding Dollar Cost Averaging (DCA)

Reduced timing risk
Less concern about buying at market peaks
Lower volatility impact
Smooths out price fluctuations over time
Psychological comfort
Less stress about market timing decisions
Consistent investment habit
Builds disciplined approach to investing
Dollar Cost Averaging involves investing a fixed amount at regular intervals, regardless of Bitcoin's price. This systematic approach helps mitigate the impact of market volatility by spreading purchases across time, potentially buying more Bitcoin when prices are low and less when prices are high.
For many beginners, DCA offers a psychologically easier entry strategy, removing the pressure of trying to time the market perfectly with each purchase.
Option 1 - Setting Up DCA Through Your Bank
Set up Strike account settings
Configure your Strike account to automatically convert received funds into Bitcoin.
Create a Standing Order from your bank
Arrange for your bank to send a fixed amount to your Strike account regularly (minimum frequency typically weekly).
Monitor transfers
Ensure your Standing Orders are processed correctly and funds are converted to Bitcoin as expected.
Track performance
Review your Bitcoin accumulation over time to assess the effectiveness of your DCA strategy.
Using bank Standing Orders is a hands-off approach to DCA, requiring minimal ongoing management. However, be aware that this method typically limits you to weekly or monthly purchases and may incur transaction fees with each Bitcoin purchase.
This approach works well if you want to automatically invest a portion of your salary or other regular income into Bitcoin without manual intervention.
Option 2 - Setting Up DCA Through Recurring Purchases in Strike
1hr
Minimum Interval
Shortest possible time between automatic purchases
0
Transaction Fees
No fees after first week of recurring purchases
5
Frequency Options
Choose hourly, daily, weekly, biweekly or monthly
Setting up recurring purchases directly through Strike offers more flexibility than bank Standing Orders. Once you've funded your Strike account, you can configure automatic Bitcoin purchases at various intervals, from as frequent as hourly to monthly.
A significant advantage of this approach is that recurring purchases become fee-free after the first week, potentially saving you substantial transaction costs over time. Since the funds are already in your account, there are no delays from deposit processing, ensuring your purchases execute on schedule.
Combining Strategies for Optimal Results
Monthly Bank Transfer
Fund your Strike account with a monthly Standing Order from your bank
Available Cash Pool
Maintain a pool of funds ready for both scheduled and opportunistic purchases
Scheduled DCA Purchases
Set up weekly or daily recurring purchases for consistent accumulation
Opportunistic Buys
Use remaining funds for Smash Buys during significant price dips
Many experienced Bitcoin investors combine approaches by maintaining a hybrid strategy. Consider setting up a monthly bank transfer to fund your Strike account, then configuring a portion for automatic recurring purchases while reserving some funds for opportunistic Smash Buys during market dips.
This balanced approach gives you the consistency and psychological benefits of DCA while still allowing you to take advantage of particularly attractive buying opportunities when they arise.
Making Your Decision: Which Strategy Is Right for You?
Emotional Considerations
Consider your reaction to price volatility. If market drops cause anxiety, DCA may help reduce emotional stress by removing the need to make timing decisions.
Time Horizon
For long-term investors (1+ years), short-term price fluctuations matter less. Focus on accumulation strategy rather than entry price precision.
Financial Flexibility
Consider how regular your income is. DCA works best with consistent income, while Smash Buy may suit those with irregular lump sums to invest.
Remember that regardless of which strategy you choose, Bitcoin investment should be approached with a long-term perspective. Whether you bought at £65,000 or £64,000 may seem significant today, but could be relatively insignificant when viewed over a multi-year or multi-decade timeframe.
Many successful investors eventually develop their own hybrid approach, combining elements of both strategies based on their personal financial situation, risk tolerance, and market outlook.