Dollar-Cost Averaging (DCA)
Dollar-cost averaging means investing a fixed amount at regular intervals (e.g. monthly) regardless of price. Here's how it works and how to simulate it.
What is DCA?
Instead of trying to time the market with a lump sum, you invest the same amount at fixed intervals (weekly, monthly, etc.). When prices are low, you buy more units; when prices are high, you buy fewer. Over time, this can smooth out volatility and reduce the impact of poor timing.
Why Use DCA?
DCA removes the need to predict when to buy. It's a disciplined approach that works well for volatile assets like crypto. You don't have to worry about buying at the "wrong" time — you spread your purchases across many dates.
📊 Use our DCA Calculator to simulate investing a fixed amount monthly in crypto using historical prices.
Limitations
DCA does not guarantee profits. In a strong bull market, a lump sum invested early might outperform DCA. In a bear market, DCA can help you accumulate at lower average prices. Past performance does not guarantee future results.
Getting Started
Choose an amount you can afford to invest regularly — even small amounts add up over time. Set a schedule (e.g. the 1st of each month) and stick to it. Many platforms support automatic recurring purchases. Our DCA calculator uses historical price data to show what your position would be worth today if you had invested a fixed amount each month. Use it to compare different cryptos or timeframes.
Tax and Fees
Each purchase is a separate taxable event in many jurisdictions. Keep records of dates, amounts, and prices. Exchange fees reduce your effective investment — factor them into your planning. The calculator provides estimates only; consult a tax professional for your situation.
For informational purposes only. Not financial advice.