Learn how to build wealth steadily by investing fixed amounts at regular intervals
Dollar-Cost Averaging (DCA) is an investment strategy where you invest a fixed amount of money at regular intervals, regardless of the asset's price. Instead of trying to time the market, you spread your investment over time, buying more when prices are low and less when prices are high.
This approach is particularly effective in volatile markets like cryptocurrency, where prices can fluctuate dramatically. By investing consistently, you reduce the impact of short-term volatility and avoid the emotional stress of trying to predict market movements.
Choose a consistent schedule (weekly, bi-weekly, or monthly) and stick to it. Consistency is key to the strategy's effectiveness, as it removes emotional decision-making from the equation.
Invest the same dollar amount each time, not the same number of coins. This means you automatically buy more when prices are low and less when prices are high, averaging out your cost over time.
DCA is a long-term strategy designed to build wealth over months or years. Short-term price fluctuations become less significant as your investment horizon extends.
By spreading purchases over time, you reduce the risk of investing a large sum right before a market downturn. This provides psychological comfort and helps you stay committed to your investment plan.
Determine how much you can comfortably invest each period without affecting your daily expenses or emergency fund.
Tip: Start with 5-10% of your monthly income
Align your investment schedule with your income (e.g., invest on payday). Weekly or monthly intervals work best for most people.
Tip: Automate your purchases for consistency
Focus on established cryptocurrencies with strong fundamentals. Bitcoin and Ethereum are popular choices for DCA strategies.
Tip: Diversify across 2-3 major assets