“Purchase every dip.” This is the guidance from Strike CEO Jack Mallers. Mallers asserts that with quantitative tightening and upcoming rate cuts and stimulus, a significant influx of liquidity is on the horizon. He argues that the US cannot afford declining asset prices, leading to a substantial wave of liquidity that will help prop up prices.
While individual investors have embraced phrases like “buy the dip” and “dollar-cost averaging” (DCA) for capitalizing on market lows or making consistent purchases, these concepts are actually derived from experts such as Samar Sen, the senior vice president and head of APAC at Talos, an institutional digital asset trading firm.
He notes that institutional traders have employed these concepts for decades to navigate their entry points into the market and gradually build exposure, all while steering clear of emotional decision-making amid market volatility.
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How institutions approach buying the dip
Companies like Strategy and BitMine have become exemplars of institutional buying, consistently purchasing coins whenever possible as part of their dollar-cost averaging (DCA) strategies.
On Monday, Strategy acquired an additional 130 Bitcoin (BTC), while the ever-enthusiastic Tom Lee bought $150 million in Ether (ETH) on Thursday, leading Arkham to tweet, “Tom Lee is DCAing ETH.”
However, although it might seem like smart money is glued to screens reacting to every dip, the truth tells a different story.
Institutions don’t rely on retail jargon, Samar explains, but the fundamental strategies of disciplined accumulation, opportunistic rebalancing, and insulation from short-term market fluctuations are very much integral to their asset engagement, such as with Bitcoin.
The primary distinction, he notes, lies in their execution methods. Retail investors often react to headlines and is chart-based, while institutional teams utilize “structured, rules-based and quantitative systematic frameworks.”
Asset managers or hedge funds leverage a mix of macroeconomic indicators, momentum triggers, and technical signals to convey a long-term perspective and “identify favorable entry points.” He elaborates:
“A digital asset treasury (DAT) desk may utilize cross-venue liquidity data, volatility bands, candlestick patterns, and intraday dislocation indicators to determine if weakness represents a genuine mean-reversion opportunity. These are the institutional equivalents of ‘buying the dip,’ but grounded in quantitative analysis rather than impulse.”
While retail DCA promotes buying the same dollar amount regularly, institutions use “execution science” for gradual exposure. Market orders are executed through algorithmic strategies to minimize market impact and hide intent.
In both cases, their methodologies are constantly shaped by mandates surrounding risk, liquidity, expected market impact, and portfolio structuring (rather than circulating memes or trading on momentum).
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What occurs when Bitcoin drops 10%–20%?
Even though it appears they are responding to the market instantly, the reality is much more calculated. Samar clarifies that quantitative-driven funds depend on statistical models to identify when a steep price shift suggests a “temporary dislocation” rather than an actual reversal.
Thus, while retail traders may take action following calls to buy the dip, institutional reactions to market downturns are methodical, guided by signals, and “governed by pre-defined procedures.”
For retail investors wanting to emulate institutional best practices regarding DCA and dip purchasing, what should they consider?
Samar suggests defining exposure upfront, before the market begins to tumble. He states that institutions don’t wait for volatility to determine their desired holdings. They establish target allocations and cost bases ahead of market movements to prevent emotional reactions to news.
The second principle, according to Samar, is to differentiate between the investment decision and the execution decision. “A portfolio manager might identify when it’s time to increase exposure, but trading is handled systematically, using strategies that distribute orders over time, seek liquidity across platforms, and aim to minimize market impact.”
Even at a retail level, the philosophy remains consistent: Determine what you want to acquire first, then devise a work plan to achieve your goal.
Lastly, evaluate your actions after the trade. Institutions assess whether the execution aligned with their strategy, where slippage occurred, and how they can improve in the future. Therefore, if you aim to accumulate Bitcoin like a professional:
“Establish your rules early, execute with composure, and review candidly — this approach will place you closer to institutional best practices than most.”
This article does not provide investment advice or recommendations. Every investment and trading action involves risks, and readers should conduct their own research before making decisions.
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