DCA Investment

Crypto-investment: DCA Strategy.

By Kriptux | Crypto Assets Online | 19 Apr 2024

Inflation is an economic problem of global magnitude. One of its effects is the direct attack on the purchasing power of money (its purchasing capacity).

In this situation, the money saved (in the Bank or in Cash) loses value over time.

Investment is the financial solution to preserve the real value of our monetary capital and even make it grow.

The Crypto Market allows you to invest without needing to have large amounts of money (which is generally not possible in Traditional Investment).

Alternative Investment through Crypto-Assets (Cryptocurrencies/Tokens) can be made using different types of financial strategies. The investment strategy called "DCA" (Dollar Cost Averaging) is one of the best-known options.

DCA is a long-term strategy that consists of making periodic purchases on an ongoing basis using fixed amounts of money.

The investment is made using the same amount of money for each purchase and at each predetermined moment (regardless of the price of the asset at that moment).

The DCA is indifferent to market trends (Bear Market/Bull Market).

The frequency of investments (asset purchases) can be whatever is considered appropriate to the interests and goals of each particular investor. The important thing is that it is fixed and can be established by choosing 1 of the following ways:

- Weekly.

- Monthly.

- Quarterly.

- Another personalized frequency according to specific interests.

In summary we can identify that when creating an Investment Plan using the DCA financial strategy, its 3 central aspects must be defined:

1- The Asset to buy.

2- The amount of Money for purchases.

3- The Frequency of purchase.

These aspects once defined are fixed.

Regarding the benefits of using the DCA strategy by investors, it is attributed the potential to reduce the average total cost of the assets purchased (the practical economic result would be to achieve a lower overall average price).

Many Crypto-Investors use the DCA strategy to buy the Cryptocurrencies and Tokens of their preference. They generally use DCA for purchases of Crypto-Assets that they plan to hold in the long term, such as Bitcoin (BTC), Ethereum (ETH) or another Cryptocurrency/Token with great future growth potential (according to their criteria).


Disclaimer: The content of this article cannot be considered as investment advice or financial advice. This post is for informational purposes only.


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