Back to Glossary
CryptoD
DCA
Dollar-Cost Averaging (DCA) is an investment strategy where a fixed dollar amount is invested at regular intervals, regardless of the asset's current price. This approach reduces the impact of short-term volatility by spreading purchases over time, resulting in a lower average cost per unit during volatile markets. DCA is widely used by long-term cryptocurrency and stock investors to build positions gradually without trying to time the market.
Example
“Instead of investing $12,000 in Bitcoin all at once, she set up a DCA plan to buy $1,000 worth every month, smoothing out the effects of price swings.”