“Purchase every dip.” This is the recommendation from Strike CEO Jack Mallers. Mallers believes that with quantitative tightening and potential rate cuts and stimulus on the horizon, the great print is imminent. He argues that the US cannot afford declining asset prices, which translates into a significant influx of liquidity poised to support prices.
While retail traders have adopted phrases like “buy the dip” and “dollar-cost averaging” (DCA) for investing at market lows or making consistent purchases, these concepts are actually borrowed from professionals such as Samar Sen, the senior vice president and head of APAC at Talos, an institutional digital asset trading platform.
He states that institutional traders have utilized these terms for decades to manage their market entry points and gradually build exposure, all while avoiding emotional decisions during volatile periods.
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How institutions buy the dip
Treasury firms like Strategy and BitMine have emerged as examples of institutions consistently buying the dip and dollar-cost averaging (DCA) at scale, diligently acquiring coins whenever possible.
Strategy acquired an additional 130 Bitcoin (BTC) on Monday, while the driven Tom Lee purchased $150 million of Ether (ETH) on Thursday, prompting Arkham to post, “Tom Lee is DCAing ETH.”
However, while it may appear that the smart money is fixated on every market dip, the truth is quite different.
Institutions do not adopt retail terminology, Samar clarifies, but the fundamental principles of disciplined accumulation, strategic rebalancing, and insulation from short-term fluctuations are very much evident in their interactions with assets like Bitcoin.
The primary distinction, he notes, lies in their method of executing these strategies. Retail investors often react to news and price trends, whereas institutional desks rely on “structured, rules-based and quant systematic frameworks.”
Asset managers or hedge funds employ a mix of macroeconomic indicators, momentum cues, and technical signals to form long-term views and “identify attractive entry levels.” He explains:
“A digital asset treasury (DAT) desk may consider cross-venue liquidity data, volatility bands, candlestick patterns, and intraday dislocation signals to determine whether a decline is a genuine mean-reversion opportunity. These are the institutional parallels of “buying the dip,” but based on quantitative statistical truths rather than impulse.”
While retail DCA suggests investing the same amount regularly, institutions approach gradual exposure with “execution science.” Market orders are replaced with algorithmic strategies to minimize market impact and avoid signaling their intentions.
Their strategies are consistently informed by factors relating to risk, liquidity, anticipated market impact, and portfolio structuring (as opposed to sharing memes about scooping up dips or trading on speculation).
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What really happens when Bitcoin drops 10%–20%?
Although it seems they are responding to market shifts in real time, the reality is much more measured. Samar elucidates that quant-driven funds utilize statistical models to detect when a rapid price change signifies a “temporary dislocation” rather than a fundamental reversal.
Thus, while retail traders may react impulsively to calls to buy the dip, institutional reactions to market declines are systematic, driven by signals, and “governed by pre-defined processes.”
If a retail investor aims to replicate institutional best practices regarding DCA and dip buying, what should they mimic?
As per Samar, the key is to establish your exposure in advance, prior to market volatility. He emphasizes that institutions don’t wait for market fluctuations to determine what they wish to own. They define their target allocations and cost bases before market movements to prevent emotional reactions to news.
The second principle, according to Samar, is to distinguish between the investment decision and the execution decision. “A portfolio manager might decide it’s time to increase exposure, but the actual trading is managed systematically through strategies that spread orders over time, seek liquidity across platforms and strive to minimize market impact.”
Even at the retail level, the concept remains consistent: First, decide what you wish to own, then thoughtfully consider how to achieve that.
Lastly, evaluate your actions post-trade. Institutions analyze whether the execution adhered to the plan, where slippage occurred, and what improvements can be made for next time. Therefore, if you want to stack sats like a professional:
“Establish your rules early, execute with composure, and assess honestly — you will be operating much closer to institutional best practices than most.”
This article does not constitute investment advice or recommendations. Every investment and trading action carries risk, and readers should conduct their own research before making decisions.
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