Dollar-cost averaging strategy (DCA

About

Dollar-cost averaging is a popular and well-tested trading strategy that works best when done over longer periods of time. The concept is

simple. Instead of investing all your money in a particular cryptocurrency at once you divide it into small amounts, choose a particular time and

day of the week, and only buy at those times.

Strategy

Example: The fund has $10,000 it wants to invest in bitcoin. Instead of spending the full amount in one go, they decide to use the DCA strategy

and divide the $10,000 amount into 20 lots of $500, then choose a particular day of the week and time to buy bitcoin — let’s say Monday at

12:00 local time. Over the next 20 weeks, The fund systematically buys $500 worth of bitcoin every Monday at midday until it has invested the

entire $10,000 amount.

Buying at regular intervals like this over a long period of time helps to reduce the impact of the market volatility — when prices rise and fall sharply

– and means, on average.

A bitcoin-focused DCA calculator illustrates this in greater detail.

Had you bought $150 of bitcoin once every Monday from Jan. 1, 2018, you would’ve spent $23,550 overall and have 3.04 bitcoin ($147,307 at

press time.) Whereas, if you’d spent $23,550 on bitcoin on Jan. 1, 2018, you would’ve ended up with 1.69 bitcoin ($81,779 at press time.)