Dollar-Cost Averaging

Dollar-cost averaging (DCA) is the strategy of investing a fixed amount of money at regular intervals — say weekly or monthly — regardless of the current price. Because the fixed amount buys more units when prices are low and fewer when prices are high, DCA smooths your average entry price and removes the pressure of timing the market.

For example, someone who buys $100 of bitcoin every Friday will accumulate BTC at whatever prices those Fridays bring. After a year, their average cost reflects the whole year's range rather than a single moment's price, and they never had to decide whether any particular day was "the right time to buy."

DCA's real advantage is behavioral: it converts investing into a routine, which protects against panic-selling lows and FOMO-buying tops — the two errors that damage most retail results. Many exchanges support automated recurring buys for exactly this reason. A common misconception is that DCA always beats investing a lump sum; in steadily rising markets a lump sum invested earlier tends to perform better on paper. DCA is a discipline and risk-spreading tool suited to volatile assets and regular income, not a guarantee of superior returns.