The Power of Dollar Cost Averaging into Bitcoin

Despite its lack of mainstream coverage and interest, Bitcoin just steamrolled the $10k barrier. This 2019 run-up may be characterized as a disbelief rally, with Bitcoin burgeoning from the bear market. Confident calls for lower price targets, from those waiting for a “cheaper” buy-in price, didn’t transpire as sub-$3k prices never materialized. These individuals will likely have to buy-in much higher than they intended, but would’ve been better served Dollar Cost Averaging (DCA), as opposed to timing such an unpredictable market.

What is Dollar Cost Averaging?

“Dollar-Cost Averaging is a strategy that allows an investor to buy the same dollar amount of an investment on regular intervals. The purchases occur regardless of the asset’s price.” — Investopedia

With dollar cost averaging, you can define how regularly you’d like to buy Bitcoin, generally using the same amount of money. For example, if you have $500 that you want to spend on Bitcoin, you can distribute that as five $100 purchases per week instead of making a lump-sum purchase — a lump-sum which can leave you overexposed, especially if you mistime the market.