Why we love Dollar Cost Averaging (and how it can work for you)

Dollar Cost Averaging (DCA) is an investment strategy that mitigates the volatility Crypto is known for. When you DCA, you commit to investing a certain amount into Crypto at regular intervals, regardless of price or market conditions. It takes away the stress of trying to time the market.

And removing stress and emotions in Crypto is always a good thing!

Let’s be honest, we’d all love to buy low and sell high, but until we get our hands on a crystal ball, adopting sensible, long-term strategies for building our Crypto wealth is key.

So, how do we do it? Here are a couple of options:

Method 1:
An easy way to get started is to automate your DCA through a crypto exchange. Many exchanges now offer a DCA function where you simply set up your regular investment amount and frequency (e.g., $50 each week into your coin of choice) and you’re good to go. The exchange will automatically buy your preferred dollar amount on a set day each week. This is a great option for those who do not have a lump sum of capital ready to invest.

(Hot tip: When choosing this option, we suggest moving your crypto once per month into your own wallet, so you don’t have your fortune sitting on an exchange).

Method 2:
This one is a bit more involved.

Take the amount of capital you wish to invest (let’s say you have $5,000) and rather than investing as a lump sum, you break it up and invest it in smaller instalments over time. This method gives you a bit more flexibility, so if you think you’re onto a good thing (or you’ve managed to procure that crystal ball), you can stop your DCA whenever you like and invest the rest in a lump sum.

Whichever way you choose, DCA removes the temptation of timing the market and avoids making counter-productive decisions out of greed or fear.

So go in smart and start your DCA today.