For those that don't know what Dollar Cost Averaging is, DCA is an investment technique where you buy a fixed dollar amount of an asset at regular intervals. It is particularly effective when dealing with more volatile assets such as Bitcoin.
Let’s think of a scenario where at the start of this year (2018) you decided to buy $900 worth of Bitcoin. You could either have bought it in one lump sum on January 1st, or you could spread out the $900 by buying $75 worth of Bitcoin each week over 12 weeks.
In which scenario would you end up with more Bitcoin?
In Scenario 1, where you buy $900 worth of Bitcoin in one lump sum you would have ended up with 0.046 Bitcoin based on its market price on January 1st
In Scenario 2, where you spread out the $900 over 12 weeks starting from January 1st, you would have ended up with 0.060 Bitcoin based on the market price every 7 days until the 17th of March.
This is a difference of 0.014 BTC or a 23% difference in favor of Dollar Cost Averaging.
I must say I am also biased when it comes to DCA as the business I am part of a NZ company - mycryptosaver.com that specialises in it. Just thought I would give my 2 cents (or my 2 satoshis
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