Corporate interest in Bitcoin continues to grow, with many using a buy-and-hold approach resembling the dollar-cost averaging (DCA) strategy. New research from Orbit Markets indicates that since 2023, a structured product known as an 'accumulator' has outperformed the DCA method. 'Our backtest results show that the accumulator strategy outperformed DCA over the past 2.5-year period,' said Pulkit Goyal, head of trading at Orbit Markets. Over three months, accumulators outperformed by 10%, and for longer terms, such as six months and twelve months, the performance improved to 13% and 26%, respectively.
The accumulator is designed for investors to commit to purchasing an underlying asset at a fixed price over time, with specific intervals and conditions attached. For instance, in a three-month accumulator, an investor might agree to buy $1,000 worth of Bitcoin weekly at a strike price of $94,500. If Bitcoin reaches $115,000, the accumulation stops. If the price dips below $94,500, the investor must double their purchase to $4,000, resulting in buying at a higher average price during a downturn.
Through backtesting, Orbit found that an average BTC acquisition cost of $39,035 was 10% lower than the DCA average of $43,329. Longer accumulators demonstrated even more favorable outcomes, leading to acquisition costs of $37,654 and $32,079 for six and twelve months, respectively.
While accumulators might not be suitable for day traders or short-term speculation, they offer a disciplined approach for corporate treasury strategies to accumulate Bitcoin efficiently in bull markets.
The accumulator is designed for investors to commit to purchasing an underlying asset at a fixed price over time, with specific intervals and conditions attached. For instance, in a three-month accumulator, an investor might agree to buy $1,000 worth of Bitcoin weekly at a strike price of $94,500. If Bitcoin reaches $115,000, the accumulation stops. If the price dips below $94,500, the investor must double their purchase to $4,000, resulting in buying at a higher average price during a downturn.
Through backtesting, Orbit found that an average BTC acquisition cost of $39,035 was 10% lower than the DCA average of $43,329. Longer accumulators demonstrated even more favorable outcomes, leading to acquisition costs of $37,654 and $32,079 for six and twelve months, respectively.
While accumulators might not be suitable for day traders or short-term speculation, they offer a disciplined approach for corporate treasury strategies to accumulate Bitcoin efficiently in bull markets.
