Dollar Cost Averaging (DCA) as a crypto investment method may not be the most thrilling way to speculate on the bitcoin price, but it is one of the most level-headed, according to proponents. Using a simple online DCA calculator, one can choose a plan for buying small amounts of bitcoin at regular intervals. While the technique may result in missing out on some true bottoms, it also avoids compulsive FOMO buying during peaks, and rests on the age-old adage that “slow and steady wins the race.”
How DCA Works
“Dollar cost averaging, not the most sexy thing … but it could be the most powerful thing you read IF you apply it,” states user ManLikeAJ in his recent read.cash post on the topic, entitled: Dollar Cost Averaging – The Most Underrated Approach to Investing.
The basic idea of DCA is to rein in the biologically hardwired desire to get rich right away, and take a more measured approach. There’s no shortage of folks in the space who have seen markets spike, bought in compulsively, and then had to turn around and sell most of their crypto savings soon after, when things corrected. Instead, investing small, doable amounts over the long term tends to smooth out the bumps. And in many cases, it puts the “tortoise investors” far ahead of their more sporadic counterparts.
Dcabtc.com provides a nice little resource for calculating (according to historic price data) how much one could have gained if leveraging DCA in BTC investment. For example, the image above shows that someone who started investing $10 a week three years ago, and continued to do this every week for those three years, would have more than doubled their investment by the end, with a 119.49% gain. This means that in 2.5 years someone could have seen $1,500 turn into $3,000, based on the market prices from this interval.
Granted this might not be as…