DCA Dollar cost averaging into Bitcoin or other cryptocurrency

DCA Dollar cost averaging into Bitcoin or other cryptocurrency

By Permabull | Permabull | 27 Oct 2020


Dollar cost averaging (DCA) is an investment strategy that aims to reduce the impact of volatility on your Bitcoin purchases.

From Wiki:

By dividing the total sum to be invested in the market (e.g., $100,000) into equal amounts put into the market at regular intervals (e.g., $1,000 per week over 100 weeks), DCA seeks to reduce the risk of incurring a substantial loss resulting from investing the entire lump sum just before a fall in the market. Dollar cost averaging is not always the most profitable way to invest a large sum, but it is alleged to minimize downside risk. The technique is said to work in markets undergoing temporary declines because it exposes only part of the total sum to the decline. The technique is so called because of its potential for reducing the average cost of shares bought. As the number of shares that can be bought for a fixed amount of money varies inversely with their price, DCA effectively leads to more shares being purchased when their price is low and fewer when they are expensive. As a result, DCA possibly can lower the total average cost per share of the investment, giving the investor a lower overall cost for the shares purchased over time.

 

If you're looking to start today with a DCA here are some helpful websites:

 

Plus some exchanges making the journey easier:

  • Swan Bitcoin <-- Recurring purchasing (US)

  • GiveBitcoin <-- Recurring purchasing (US)

  • River () <-- Recurring purchasing (US)

  • Cash App <-- Recurring purchasing (US)

  • Gemini <-- Recurring purchasing (US)

  • Voyager <-- Recurring purchasing (US)

  • Binance.us <-- Recurring purchasing (US)

  • Relai [NO-KYC] <-- Recurring purchasing (EU, and CH)

  • Luno <-- Recurring purchasing (UK, EU (SEPA), AU, SG, ID, MY, ZA, NG, UG, ZM)

  • Uphold <-- Recurring purchasing

  • BullBitcoin <-- Recurring purchasing (CA)

  • Amber <-- Recurring purchasing (AU)

  • Independent Reserve <-- Recurring purchasing (AU & NZ)

  • BTC Markets <-- Recurring buying using BPay (AU)

  • Bitaroo <-- Recurring purchasing (AU)

  • Vimba <-- Recurring purchasing (UK & NZ)

  • Ice3X <-- Recurring purchasing (ZA)

  • BitNob <-- Recurring purchasing (NG)

  • Autocoin <-- DIY on BitSTAMP

 

The reality is that the best time to buy Bitcoin is at when market hits bottom - buying the dip. Like back in March (2020). But these are exceptions rather than the rule. And the cost of chasing dips is very high: stress, your time and energy. It’s always better to do the right thing (DCA) than being lucky (buying the dip) but cheating on your dollar-cost averaging from time to time is quite a good idea when you can see a dip of more than 5% compare to your last buy. This at least worked for me.

 

Thank you guys for reading, liking, following, and tipping. Extremely appreciated! 👍


Permabull
Permabull

Saw crypto as a way to make some cash, a get rich quick scheme. Learned about the tech and will stay in forever. Watching the GOV spending in 2020 made me realise how fiat is controlled way too much and becoming worthless be a minute. Bitcoin for the WIN!


Permabull
Permabull

Born to be bull.

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.