DCA: Dollar Cost Averaging
DCA is the simplest, most stress-free way to invest in crypto. Buy the same amount regularly, regardless of price. No timing required.
What is DCA?
Dollar Cost Averaging means investing a fixed amount at regular intervals, regardless of price.
Example:
- You invest $100 in Bitcoin every week
- Week 1: BTC = $50,000 → You get 0.002 BTC
- Week 2: BTC = $40,000 → You get 0.0025 BTC
- Week 3: BTC = $60,000 → You get 0.00167 BTC
- Week 4: BTC = $45,000 → You get 0.00222 BTC
Total: $400 invested → 0.00839 BTC
Average price: ~$47,675 (better than $50,000 lump sum!)
When prices are high, you buy less. When prices are low, you buy more. Over time, this averages out to a good entry price. You don't need to time the market - time IN the market matters more.
DCA Benefits:
- No timing required - Remove the stress of "when to buy"
- Reduces volatility impact - Average out the highs and lows
- Emotionally easier - Systematic approach beats emotional trading
- Builds habit - Consistent investing creates wealth
Setting Your DCA Schedule
Choose Your Frequency:
| Frequency | Best For | Pros/Cons |
|---|---|---|
| Daily | Heavy investors | Best averaging, higher fees |
| Weekly | Most people | Good balance of averaging and fees |
| Bi-weekly | Paycheck aligned | Matches income timing |
| Monthly | Lower amounts | Fewer fees, less averaging |
Choose Your Amount:
- Only invest what you can afford to lose completely
- 5-10% of savings is common guideline
- Never invest emergency fund money
- Better to invest small consistently than large occasionally
Set your DCA to trigger right after you get paid. This way, you invest before you can spend it on other things. "Pay yourself first" by investing automatically.
What to DCA Into:
- Bitcoin (BTC) - Most conservative, longest track record
- Ethereum (ETH) - Second most established
- Mix of both - Common approach: 60% BTC / 40% ETH
- Avoid: DCA into high-risk altcoins
Automate Your DCA
The best DCA is one you don't have to think about. Set it and forget it.
Exchange Auto-Buy Features:
- Coinbase - Recurring buys (daily/weekly/monthly)
- Kraken - Auto-buy feature
- Gemini - Recurring purchases
- Swan Bitcoin - Bitcoin-only, auto DCA
- River - Bitcoin DCA specialist
How to Set Up (Coinbase Example):
- Log into Coinbase
- Go to "Recurring buys"
- Select cryptocurrency (BTC, ETH, etc.)
- Enter amount (e.g., $50)
- Choose frequency (weekly recommended)
- Select payment method
- Confirm and enable
Some exchanges charge high fees for small recurring purchases:
- Coinbase: ~1.5-2% per purchase
- Coinbase Pro/Advanced: ~0.5%
Consider batching into larger, less frequent purchases if fees are high.
Stay Consistent (The Hard Part)
The magic of DCA only works if you stick with it through both good and bad times.
Common Mistakes to Avoid:
- Stopping when price drops - That's when DCA works BEST!
- FOMO buying extra during pumps - Stick to your plan
- Panic selling during crashes - DCA assumes you hold
- Constantly changing amounts - Pick a number and stick to it
DCA is emotionally hardest when it matters most:
- Price crashes 50%? Keep buying.
- Price pumps 100%? Keep buying (same amount).
- Everyone says crypto is dead? Keep buying.
Those who stayed consistent through 2022's crash are very happy in 2024/2025.
DCA Long-Term Results (Historical BTC):
- $50/week from 2019-2024: ~3x return
- $50/week from 2020-2024: ~2.5x return
- Through all crashes, bear markets, FUD
Use tools like dcabtc.com to see how DCA into Bitcoin has performed over various time periods. Seeing historical data helps you trust the strategy during difficult times.