What is Dollar Cost Averaging Bitcoin?
Bitcoin dollar cost averaging consists in investing a fixed amount of USD, into BTC, on regular time intervals. You’ll often see it referenced by its abbreviation of "DCA".
Purchasing $10 every week, for example, would be dollar cost averaging.
This strategy is mostly used by investors that are looking to purchase Bitcoin for the long-term, since it protects them from potentially allocating all their capital at a price peak.
Investing in Bitcoin with no DCA (Example)
It’s January 1st, 2018, and John decides to purchase $5,000 worth of Bitcoin today.
The Bitcoin price at the time was $13,800 per coin, which means that John now owns 0.362 BTC.
Investing in Bitcoin using DCA (Example)
It’s January 1st, 2018, and Alice decides she wants to purchase $5,000 worth of Bitcoin.
However, instead of investing the entire amount today, she decides to purchase $500 every month, for 10 months.
10 months later, Alice owns 0.61 BTC. That’s allmost twice as much as John, even though both invested the same amount.
Source link:
https://dcabtc.com/?sd=2016-03-23&sda=8_years&f=weekly&d=8_years&ac=25000&c=true