Digital Asset News host explains his dynamic Bitcoin DCA strategy and covers market news
Solo presenter Rob from Digital Asset News discusses his decision to halve his Bitcoin purchase amount due to rising risk levels, and covers current crypto market developments.
Summary
Rob from Digital Asset News explains why he bought only half his usual Bitcoin amount, tying the decision to a dynamic dollar-cost averaging (DCA) strategy based on risk level indicators. He walks through how the system works across multiple cryptocurrencies, showing current risk readings for Bitcoin, Ethereum, BNB, Ripple, Solana, Tron, Dogecoin, Chainlink, and Cardano. He also covers several market developments: Michael Saylor's latest Bitcoin purchase, Bitmine's $131 million Ethereum buy, a US strike on Iran and its limited market impact, a rising probability of a Fed rate hike, and a $5.7 million hack across six Cosmos-linked blockchains. The episode closes with a live Q&A session covering the four-year cycle, the Afghanistan withdrawal, Congressional crypto clarity, and the upcoming 20-hour charity livestream.
Key Takeaways
FULL TRANSCRIPT
Why Rob Halved His Bitcoin Purchase Today
Rob: As the price of Bitcoin chugs along, it becomes inevitable that I have to actually not buy as much Bitcoin as I usually do. Today, I bought half as much as I've been usually doing across the timeline. The reason why — and I think most of you who have watched the videos for quite some time understand this — is about risk levels and dynamically dollar-cost averaging.
In the past, dollar-cost averaging was very simple: just do $10 a day, $20 a day, $10,000 a day — I don't know what you're doing — but that was essentially DCA across the board. But as we've looked at this numerous times as far as dynamically dollar-cost averaging, we can see that it is far superior for the gains as time goes on. As the risk levels go down, you actually pick more up. As risk levels go up, you actually buy less.
How Dynamic DCA Works in Practice
So today, as we can see here, we'll take a look at Bitcoin and some select altcoins to see what the risk levels are. We can see that today at the highest risk level of 1.0, you would have a Bitcoin price of $256,000. Now, anybody who has been around for quite some time can tell you that that $256,000 time frame for Bitcoin should have been two or three years ago, when all the experts told us how much it would actually go to. I think it's going to take a little more time. I think people should be a little bit more conservative, but that's what the risk level at 1.0 looks like. Today, it has actually increased — we've gone from 0.28, 0.29, all the way up now to 0.45 — and that puts us at a range of around $79K or so.
Now, how this all works is quite simple. If we take a look at the Bitcoin historical risk levels, it's quite simple for dynamically DCAing. I'll break it down as easily as I can. You can start wherever you want to. Some people start at the 0.5 to 0.6 level. In 2017, 2016, the price was much, much lower obviously. But if you want to start at, let's say, 0.4 to 0.5 — and we can see on the chart that that is quite a big chunk of time, it's been like that for a lot of different time frames — let's say you put in $100 per week.
Let's say you did that on a Wednesday. Then the next Wednesday, you take a look and you're like, "Oh, the risk levels dropped, meaning the price of Bitcoin dropped. Instead of doing $100 per week, I'm going to do $200 per week." And let's say it goes to 0.2 to 0.3, which is kind of rare, and you say, "I'm going to double up again and do $400." And then 0.1 to 0.2, $800. And over here, 0.0 to 0.1, you might say, "I'm going all in — $1,600 a week."
Now, just extrapolate those same numbers. Let's say you do $100,000 per week at 0.4 to 0.5 — that seems like a lot, but just wait. If we do 0.3 to 0.4, as the risk levels go down and the price goes down, now you're at $200,000 per week. You double up again, that's $400,000 per week. And over here, you're looking at $800,000 per week. Now, that's just throwing out numbers. I don't know what you're at. Some of you are laughing at those numbers going, "Oh, that's very cute — just $800,000 a week." But everybody's goal is different. My goals aren't your goals. But as time has gone on, we've seen that those risk levels have worked out pretty well.
Current Risk Levels Across Major Cryptocurrencies
Now, today that is Bitcoin's risk level. If we take a look at Ethereum's risk level, it's actually quite high — 0.558. So I don't know why people would be buying a bunch of Ethereum, Tom Lee, but that's where the risk levels are. It might pay off pretty well because it's supposed to be the future of finance, so we'll see.
How about BNB, one of my favorites? It's actually low — 0.41. So maybe that's something to look into. How about Ripple? 0.46, roughly around the same area as Bitcoin. How about Solana? Same — 0.46. And Tron is actually the highest because it has outperformed over the last year. Tron at 0.60 right now.
We can take a look at Dogecoin — it's very low, 0.15. Before you laugh at Dogecoin — which I laugh too, it's kind of funny — Dogecoin has been in the top 20 since, correct me in the comment section, roughly 2018. So just saying, it could still rip. And if you want to know why altcoins would rip — there was a video we did on Saturday where I explained it very simply. It's called speculation and a little touch of utility. You have those two things, you're going to outperform, and that's pretty much it.
Chainlink is at 0.4, and Cardano is actually quite fitting at 0.2. But those are the risk levels.
Rob's Morning Routine and Buying Decision
So this is why this morning I woke up early to check those things. Cash App is what I use right now to buy Bitcoin. I use Kraken to buy all my altcoins, and I'm actively buying altcoins right now. But as I was taking a look this morning, I'm like, "Wow, that risk level is a little bit higher — I need to cut things in half." And that's what I did.
Of course, people in the comments will come in and say, "Rob, you're a moron. You should buy as much as you possibly can, just like Saylor, and stick it in there and buy every dip." You can do that. It works out pretty well at some point. But I just want to remind everybody that when you slow down sometimes, as the risk levels drop, we can see overbought areas in RSI and things like that if you want to get into those.
Four-Year Cycle Context
But just taking a look at the four-year cycle tracker — you can find this on Dante's Crypto, just click on the tools, four-year cycle — you can see that right now we are 37% from our all-time high. This same time four years ago, we were 70% down. I still think we can go down a little bit further, and I'm actually banking on it. I think it could actually happen. But if it doesn't, it doesn't matter. I did my job. My job was to buy a boatload of Bitcoin as best as I could when the risk levels were low. I did it. If I get a couple more shots at it, I'm happy. If I don't, still happy.
But if people are like, "Why are you taking your foot off the gas? You should just keep buying" — well, if we take a look and go back just a little bit to see where we're at: right now we're at 37% down. Last cycle, in roughly 2022, you can see in the upper right-hand corner, negative 59%. If we go back to when it was negative 38% from its all-time high, that was $42,000. I'm sure people would love to buy at $42,000. I sure wish I could do that myself. But people back then were like, "No, no, no, it's going to do this, it's going to do that," and it eventually just kept going down and down.
So the difference right now is: if the risk levels are high and I'm 37% down from the all-time high and it does go down — how far could it go? Do you want to buy at $42K or do you want to buy somewhere around the $16,000 range? It really just comes down to your preference. But I will say again: if we go down one more time and actually hit those levels, I don't think we're going down to 70%. But I can see another 50% from all-time high. And if that happens, the risk levels will go down, and I will be doubling or quadrupling my position at that point.
Market News: Geopolitics, Fed Rate Hike, and Institutional Buys
Now, there is a point to be made for the bull case. The bullish case is this: in bear markets, when there's negative news, it intensifies the losses in the digital asset space. When you are in a bull market, it seems like negative news really doesn't do too much — doesn't really move the needle this way or that way. So it just depends on the market you're in.
Just about two and a half hours ago, apparently the US struck Iran. I'm not going to go too deep into it because it's the same thing we've been doing for the last several months — America strikes Iran, Iran says, "We're defiant and we're going to get you back," and America says, "No, we're the strongest, you're the losers." It's like Groundhog Day. But even when this happens, the market starts to react, and right now Bitcoin itself is not doing much at all. Actually, in the last hour, it's actually increased.
We also have an increase in the possibility of a Fed rate hike. We went from roughly 57% for a rate hike — the next meeting will be the 16th of September, which is about two weeks away — and it went to 66%, so you've got two-thirds of a chance we're actually going to raise rates. After that speech from the Federal Reserve chair, we know that it's a little more hawkish than before. Again, it didn't really move the markets this way or the other, which is pretty good.
There was some good news: Michael Saylor bought another 4,600 Bitcoin for $370 million. And Tom Lee — I do like this guy because he does what he says he's going to do — Bitmine just bought 53,000 ETH worth $131 million. Congratulations to Tom and Bitmine and Ethereum holders. That could be why there's a little bit of a pump going on.
DeFi Hack: Cosmos Labs and the Six-Chain Exploit
Lastly, as we bounce between good news and bad news, just remember: it's not how much you make, it's how much you keep. Another hack has happened yet again in this industry. If I could do a video every day on a DeFi hack, I would actually be doing two or three videos a day.
Cosmos Labs says it wrongly cleared the bug behind a $5.7 million six-chain hack, and it did so in an incorrect fashion. Attackers used a flaw in shared Cosmos software to steal from six blockchains, selling the proceeds for $5.7 million worth of tokens between August 20th and 25th. Some of you will look at that and go, "Who cares about $5.7 million?" It matters because when you want an industry to adopt your product, you want to put your best face forward. If you keep getting hacked, even though on the back end you're saying, "This is the future, you guys really should jump on" — well, should we jump on and use all our customers' funds so they can get hacked? We think not.
A researcher reported the flaw in April, but testers concluded live networks were not vulnerable and patched the bug without issuing an advisory. Mantra Chain, which lost $3.6 million, published its own postmortem saying the patch was released only 20 hours before the attack began and didn't identify that the flaw was fixed. I don't know if this is real hackers or an inside job. It just seems very odd that every day a DeFi project gets hacked, and that's why I will not be putting my money into that.
Live Q&A
Rob: A1 Rising says, "What happened to America's pride being the biggest badasses in the world? We are America and we are the best. Go America." That part's true. I'll never apologize for being American. I do love this country. Now, the people that are in charge sometimes I'm not too impressed with, but it is interesting how things are unfolding right now. You can say you've decimated someone only so many times and have them come back, and you realize: oh, this is all show, this is all posturing, this is all sticking your chest out. Maybe I'm wrong — maybe people drop nukes tomorrow, I don't know. But it is not a good look for America. That's all I'll say.
Ahar says, "I wonder why we're pumping again today, Rob." Yeah, it's a funny thing because I thought we would go lower than $58K. I thought we would pull back a little bit more, but we didn't. And I was like, well, I have a plan. The plan is just to keep putting into it and buying more. Some Mondays I didn't feel like buying, but it's on automatic, so the only thing I had to adjust was the increases or decreases. It had just been increasing for a bit and then was stagnant. But there were some weeks where I'm like, damn, that's a lot of money to put in. It works out though. It works out.
DJ says, "Eight more weeks and we'll know if the bottom is truly in and the four-year cycle is intact." Yeah, because if we don't go below $58K, then as far as time frames go, the four-year cycle will be a little bit wonky. Every Q4 of the post-halving year has maintained all the way up to last year, but the usual cycle goes to roughly 364 to 367 days — somewhere around there — from the all-time high to the absolute bottom. That will be interesting. It's going to be fun times.
Frosty says, "My computer mouse is only working 50%. It's so annoying. And I'm in the middle of the woods and I'll be there for weeks." That actually sounds quite enchanting. Rusty's in a place where everybody would probably like to be — away from the hustle and bustle of the rapidly increasing and decreasing crypto markets and the outlandish news that is going on. I would actually like to be there. What are you doing in the woods? Taking a vacation, hopefully. Sounds like it.
If you want to get notified of all the hacks that are going on, just follow DB Crypto and a host of others.
I do want to make sure of one thing before I move on. We're doing a 20-hour livestream, and it's for charity, like we talked about before. It's going to be pretty good. Here's the lineup so far. At 6:30 on Thursday — and again, this is 20 hours — we'll start with Rob Art, who's an interesting character on X and has been calling some things right. Then we've got Wes from Smart Money Tracking, and Jerry Hall, and I've got Payton, and Andy from Mostly Bitcoin Mining, and also John Wang from Call Sheet coming in. FD White is at 4, I've got DB — or Dave — at 5:30, Robert Kiyosaki, who we'll mostly be talking to about flipping real estate, and then we've got James Murphy, also known as MetaLawMan, then Stephen from Crypto, and then Jimmy Wong, and then there are some other surprises that'll be put in there later. It'll be a good time. Again, a 20-hour livestream on Thursday just to get some funds in to help support a poor animal shelter that needs a new place to go.
Darking says, "I don't think these are hacks. They're just cover-ups to mask gains from the IRS. Don't sue me." But that does make a lot of sense.
DJ says, "Eight more weeks and we'll know if the bottom is truly in and the four-year cycle is intact." Yeah, because if we don't go below $58K, then the four-year cycle will be a little bit wonky. Now, every Q4 of the post-halving year has maintained all the way up to last year, but the usual cycle goes to roughly 364 to 367 days from the all-time high to the absolute bottom. That will be interesting.
Ferrar says, "Is the 15th of February?" I think it's the 16th — let me take a peek. Yes, the 16th of September is the next Fed meeting. We'll be able to see.
A1 says, "I'd rather see us still bombing Iran than running away, leaving equipment and people behind, getting killed as we leave them. That was the horrible Afghanistan withdrawal. We left billions of dollars of things behind, and unfortunately the individuals and people that helped us were captured by the Taliban. It was a blight on America." And that's not me talking — that's pretty much what it was.
Someone says, "Expect a drawback September 15th when Congress doesn't approve clarity." No way. You're telling me that in a midterm year, the opposing party would not want to give the party in power a political win? That's crazy talk. I would think that the Democrats would totally welcome and embrace the crypto and digital asset space and put in laws that could give us clarity, thereby allowing for the sitting president of the United States to do a big fat victory lap and rub it in their faces about how he's the crypto president who gets things done. That's crazy to think about. That was sarcasm.