What Is The DCA Bitcoin Investment Strategy All About?

Checking a ticker frantically, fretting about prices and thinking that the price is too high for you to buy, is the wrong way to go about BTC. The DCA Bitcoin strategy will allow you to invest at any price while you avoid the anxiety and the FOMO.

Here is what DCA Bitcoin is, how it works, and how you can use it to your advantage.

What is DCA Bitcoin?

DCA Bitcoin stands for Dollar Cost Averaging Bitcoin. Purchasing BTC according to the main tenets of this concept entails:

  • Buying set amounts of BTC periodically
  • Defining how much you want to buy in terms of fiat
  • Setting the intervals of time when you want to buy it – once a week, twice a month, once every two months…
Did you know you can buy BTC at any price point and make money?

When you engage in DCA Bitcoin, you gain exposure to this cryptocurrency and avoid the following pitfalls:

  • Investing all your money at once
  • Buying at a single price point – which can be a high price point altogether
  • Panicking over price volatility

Who is DCA Bitcoin Good for?

Now that you know how the DCA Bitcoin strategy works, you are probably wondering if it is a good choice for you. Here is what you must consider before you decide:

  • DCA works better for those who plan to hodl long-term
  • You should keep a record about how much you buy and at which price you bought
  • Consistency makes DCA work better. You should be buying at the same time intervals
DCA Bitcoin is perfect for those who want to hodl

If you are willing to commit to the DCA Bitcoin strategy, then you should keep the following in mind:

  • It is a conservative investment strategy
  • DCA works well for people with relatively small budgets
  • Risks are lower
  • However, you should not expect the same kind of returns expert traders get – no “mooning”
  • Remember, DCA is about consistency, patience, and discipline

Adjusting your DCA and Bringing your Purchasing Price Averages Down  

You can accelerate your purchases when Bitcoin prices are relatively low. This allows you to bring your purchasing price average down. That is part of the classic “buy the dip” strategy that long-time Bitcoin hodlers always refer to.

Buy bit by bit to optimize the average cost of your exposure to Bitcoin

It all depends on how much you have budgeted for your Bitcoin purchases. Nevertheless, you should also consider that if you buy less BTC when the price is “high,” the market can reduce your purchasing power further.

Therefore, you should always think twice before reducing your budget when you think prices are high.

Advantages and Disadvantages of DCA Bitcoin Purchases

Calling the top or the bottom of the market is difficult. Even the most seasoned traders miss those calls sometimes. That is the main advantage of the DCA Bitcoin strategy; it allows you to buy without a deep understanding of the market.

DCA Bitcoin Concept
Who said average is bad?

Other advantages of this strategy are:

  • It takes a lot of the emotional component out of the investment
  • Allows you to learn more about BTC and trading as you gain exposure incrementally
  • Protects you from putting all your budget in, at the top of the market

But DCA is not the best strategy to buy Bitcoin always. Again, it is a conservative strategy. Therefore, you will not be the most efficient buyer because you will use some of your budget to buy above the price at the bottom of the market.

Combining DCA with Other Strategies to Accumulate More Bitcoin Faster

Incremental exposure also means that the DCA Bitcoin strategy will not allow you to accumulate BTC fast.

Unlock the power of DCA and combine it with other strategies to get more BTC

You can overcome this disadvantage with the following measures:

A Final Word on this Strategy

Now that you know how the DCA Bitcoin strategy works, who is it for, what are its advantages and disadvantages, and how you can engage in it, you can start lowering your risk of losing money in terms of fiat when you buy BTC.

People who are on the fence are closer to the average. Why not jump into Bitcoin with a low risk strategy fit for the average nocoiner out there?

If you know anyone who is looking at Bitcoin who is still on the fence due to the risk, you can suggest DCA. It is a great way of onboarding new hodlers, provided they understand the strategy itself and commit to internalizing how BTC works.