A five-year backtest of Bitcoin's dollar-cost averaging (DCA) strategy reveals that using 3x leverage offers minimal additional returns compared to 2x leverage, while significantly increasing risk. The study shows that a 3x leveraged investment yielded a final return of 277.16%, only slightly higher than the 264.24% return from 2x leverage. However, the maximum drawdown for 3x leverage reached a staggering 95.95%, compared to 85.95% for 2x leverage. The analysis highlights that while 3x leverage can slightly outperform 2x during market rebounds, it consistently lags behind in net asset value over the long term. The study concludes that spot DCA remains the optimal long-term strategy, with a compound annual growth rate (CAGR) of 18.54% and a maximum drawdown of 49.94%. The findings suggest that the high volatility and daily rebalancing associated with 3x leverage lead to significant volatility drag, making it an inefficient choice for regular investment.
3x Leveraged BTC DCA Yields Minimal Gains with High Risk, Study Finds
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