Comparing classic monthly DCA with concentrated liquidity on a BTC/BTC pair using real market data from 2021–2025 Introduction In this article, I simulate a simple long-term Bitcoin accumulation strategy based on regular monthly investments using the classic Dollar-Cost Averaging (DCA) approach. The idea is straightforward: invest a fixed amount every month and steadily build a BTC position over time, without trying to predict market tops or bottoms. For the analysis, I use real historical Bitcoin price data from 2021 through 2025. This period covers a full market cycle, including strong bull runs, deep corrections, and extended sideways phases — making it a realistic test environment rather than an idealized scenario. Many long-term investors focus mainly on entry price and timing, but much less on what happens after they buy. A DCA plan helps you build a position, but the capital itself usually sits idle between purchases. That raises a practical question: can we make the accumulation process more capital-efficient — without turning it into a high-risk trading strategy? I then extend the strategy by adding a concentrated liquidity (CLMM) position on a Bitcoin-denominated pair, such as cbBTC/WBTC. Instead of letting the accumulated Bitcoin sit idle, the BTC purchased through DCA is deployed into a CLMM pool on this pair. The intention is not to take on additional directional exposure — since both assets represent wrapped versions of Bitcoin — but to use market activity within the pool to gradually accumulate more BTC through trading fees. At the end of the article, I compare both approaches under identical market conditions and analyze how much Bitcoin each strategy would have accumulated over time. The goal is not to chase unrealistic returns, but to explore whether a disciplined, slightly more active approach can meaningfully improve long-term BTC accumulation. Regular DCA Investments The core idea behind DCA is simple: stay in the market consistently. Instead of trying to time tops and bottoms, we invest the same amount at regular intervals, no matter where the BTC price is. In the simulation, I assume: Investments are made once per month
The investment amount is $1,000 USD per month
Purchases are executed regardless of the current BTC price Investments are made once per month The investment amount is $1,000 USD per month Purchases are executed regardless of the current BTC price This creates a clean baseline: a disciplined, hands-off accumulation strategy that many long-term BTC holders can relate to. CLMM After each monthly BTC purchase, the accumulated BTC is not left idle — it is deployed into a CLMM pool. Instead, it is deployed into a concentrated liquidity (CLMM) pool on a Bitcoin-denominated pair — for example, cbBTC/WBTC. The logic here is straightforward: Both assets represent wrapped versions of Bitcoin
The goal is not to earn yield in USD terms
The goal is to increase BTC holdings over time using trading fees generated inside the pool Both assets represent wrapped versions of Bitcoin The goal is not to earn yield in USD terms The goal is to increase BTC holdings over time using trading fees generated inside the pool How the CLMM Position Is Managed In this strategy, I do not use automatic rebalancing. In the simulation, liquidity is provided within a fixed price range of 0.9965 to 0.9989 (expressed as cbBTC/WBTC). I keep this range constant and do not “chase” the price. If the pool price stays within the range, the position remains active and earns fees. If the price moves outside the range, the position becomes inactive and stops earning fees until it returns into range — and I simply wait rather than rebalancing immediately. 0.9965 to 0.9989 There is also an interesting practical detail: when the price leaves the range, the liquidity position can become single-sided. That situation can be used to add liquidity without performing a swap, because you may already hold mostly the asset needed for the deposit. Why Does the Price Leave the Range? Range breaks often happen during strong BTC price moves, especially when arbitrage and pool rebalancing do not catch up instantly. In real markets, this can occur during sharp volatility spikes, fast trend moves, or periods of temporary inefficiency. Simulation Assumptions for CLMM To keep the simulation realistic, I include the following assumptions: Swap cost (slippage + fees): 0.02% per swap between the pair assets
Average CLMM fee return: 5% APR — treated as an average fee yield over time (the real value can vary significantly depending on volume, volatility, and market conditions) Swap cost (slippage + fees): 0.02% per swap between the pair assets Average CLMM fee return: 5% APR — treated as an average fee yield over time (the real value can vary significantly depending on volume, volatility, and market conditions) These numbers are not meant to “prove” a best-case outcome — they are simply consistent assumptions that allow us to compare the baseline DCA strategy against the DCA + CLMM approach. Choosing the CLMM Range Range selection is one of the most important parts of making CLMM work. A simple and practical starting approach is: Pick the pool you want to use
Over the course of a month or two, observe and record the current pool price regularly
Use this observation to estimate how tightly the price tends to move in normal conditions
Based on that, define a range that is as narrow as possible, but still realistic enough to stay active most of the time Pick the pool you want to use Over the course of a month or two, observe and record the current pool price regularly Use this observation to estimate how tightly the price tends to move in normal conditions Based on that, define a range that is as narrow as possible, but still realistic enough to stay active most of the time A narrower range usually means better fee efficiency — but also a higher chance of going out of range. Finding the “right” balance is a topic on its own, and I plan to publish a dedicated follow-up article focused entirely on how to choose ranges for BTC-based CLMM pools. Right now, I am collecting the data. Simulation Results Let’s go through the charts in more detail. Cumulative BTC by Month [1] This chart shows how BTC accumulates from 2021 to 2025. You can clearly see that BTC is accumulated much faster between 2021 and 2023 than after 2023. That’s not surprising — it’s mainly a consequence of rising BTC prices. With the same monthly USD investment, you simply buy less BTC when the price is higher. DCA vs. DCA + CLMM When comparing the two curves, the first two years look very similar. The difference is small because the BTC position is still relatively small, and the fee income from CLMM doesn’t have much capital to work with yet. Over time, as the BTC position grows, the gap becomes more visible. The CLMM strategy starts to pull ahead because the portfolio is large enough for trading fees to make a meaningful difference. Assumptions: in the simulation, DCA + CLMM fees are modeled as an average 5% APR, and whenever a swap between cbBTC and WBTC is required, I apply a 0.02% cost to account for fees and slippage. Assumptions: Below is a numerical comparison of both strategies as of the end of 2025: Total invested (USD): 60,000
BTC accumulated: DCA 1.50 BTC, DCA + CLMM 1.73 BTC
Fees paid (already reflected in the BTC totals): DCA 0 BTC, DCA + CLMM 0.003 BTC
Average entry price (USD per BTC): DCA 40,009, DCA + CLMM 34,707
Portfolio value (USD): DCA 135,000, DCA + CLMM 156,303
BTC price at end-2025: 90,406 USD Total invested (USD): 60,000 Total invested (USD): BTC accumulated: DCA 1.50 BTC, DCA + CLMM 1.73 BTC BTC accumulated: Fees paid (already reflected in the BTC totals): DCA 0 BTC, DCA + CLMM 0.003 BTC Fees paid (already reflected in the BTC totals): Average entry price (USD per BTC): DCA 40,009, DCA + CLMM 34,707 Average entry price (USD per BTC): Portfolio value (USD): DCA 135,000, DCA + CLMM 156,303 Portfolio value (USD): BTC price at end-2025: 90,406 USD BTC price at end-2025: It is important to note that these results are sensitive to the assumptions used in the simulation. The final outcome depends heavily on factors such as the selected price range, the actual trading volume in the pool, and the effective fee APR. Different parameters — or a different market environment — could lead to materially different results. Portfolio Value by Month [2] and [3] Charts [2] and [3] also show that, over the long term, the DCA + CLMM strategy outperforms the classic DCA approach. The difference becomes more noticeable as the portfolio grows and fee income begins to compound. However, beyond a certain point, the total portfolio value is primarily driven by the price of Bitcoin itself. While during 2021–2022 BTC volatility was partially absorbed by the ongoing monthly investments, by 2023 the portfolio value becomes increasingly dependent on BTC price movements. In other words, as the accumulated BTC position grows larger, market price fluctuations begin to dominate the portfolio’s USD value, regardless of the accumulation method. Conclusions One important takeaway is that the DCA + CLMM approach tends to work best during sideways markets, where price moves back and forth within a range and trading activity generates steady fee income. DCA + CLMM performance usually drops during strong directional moves — both sharp sell-offs and aggressive rallies — because positions go out of range more often and stop earning fees. This suggests that, if the goal is to improve BTC accumulation across all market regimes, a second component may be needed — something that can keep accumulating BTC even during highly unstable, trending periods. I plan to explore such a mixed strategy in upcoming articles. At the same time, it’s worth highlighting what this strategy is — and what it is not. DCA + CLMM can accelerate BTC accumulation, but it still relies on the same long-term mindset as classic DCA: staying invested for as long as possible and avoiding emotional reactions to volatility. For most investors, the biggest mistake is not the choice of strategy — it’s leaving the market too early. Risk Note: Smart-Contract and Custodial Risk DCA + CLMM also introduces additional risks that do not exist in pure DCA. Once you move beyond simply buying BTC and holding it, you are trusting a DeFi protocol and using wrapped BTC assets. That means you are exposed not only to smart-contract risk, but also to the custodial and issuer risks behind the BTC wrappers. These risks can be reduced by being selective about the protocol and the wrapped BTC assets you use. Position sizing and diversification across protocols can also help reduce exposure. The most conservative option, of course, is to skip DeFi entirely and accumulate native BTC directly to a Bitcoin address — but that comes with the trade-off of giving up any yield from liquidity provision.

The writer is smart, but don't just like, take their word for it. #DoYourOwnResearch before making any investment decisions or decisions regarding your health or security. (Do not regard any of this content as professional investment advice, or health advice)

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Comparing Classic Monthly DCA With Concentrated Liquidity on a BTC/BTC Pair: A 2021–2025 Simulation

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