What is Dollar Cost Averaging (DCA)? A Guide for Newbie Cryptocurrency Investors

What is DCA? Basic Concept

Dollar-Cost Averaging (DCA) is a strategy of investing a fixed amount regularly, regardless of the price fluctuations of the asset. It is a popular investment method, especially for beginners in cryptocurrencies, as it allows investors to steadily accumulate assets without being swayed by market volatility.

Understanding the Mechanism of DCA Simply

Simply continue to mechanically buy a fixed amount (e.g., 50,000 yen worth of BTC) every week or month.

Important Points:

• Fixed amount: Regardless of whether the market goes up or down, the investment amount remains unchanged.
• Automatic averaging: Buy more during cheap periods and less during expensive periods → As a result, the average purchase price is optimized.

Three Benefits of DCA

1. Eliminate timing risk There is no failure in buying at the market peak. There is no need to worry about “Is it the right time to buy?”

2. Reduces psychological fluctuations Whether BTC surges or crashes, I simply continue to buy at a fixed amount without getting emotional. There’s no worry about failing due to emotional trading.

3. The Ultimate Strategy for Beginners No complex knowledge or technical analysis is required. It can be routine-ized, making it easier to continue.

In the end, who is DCA for?

For those who want to hold cryptocurrencies for the long term and do not want to be swayed by the ups and downs of the market. By using the automatic purchase feature of exchanges like Bybit, you can completely set it and forget it.