What is DCA? What are the benefits of DCA?

What is DCA?DCA is a long-term strategy where investors buy small amounts of an asset regularly over a period of time, regardless of the price (e.g., investing $100 per month in Bitcoin for a year, rather than investing $1,200 all at once). Their DCA schedule may change over time and, depending on the investor's goals, may last for months or years.

While DCA is a popular way to buy Bitcoin, it is not unique to cryptocurrencies, and traditional investors have used the strategy for decades to hedge against stock market volatility. If you invest through your employer's retirement plan every payday, you may even already be using DCA.

What are the benefits of DCA?DCA can be an effective way to invest in cryptocurrencies without doing the hard work of researching market timing or the risk of impulsively investing all your money at a peak.

The key is to choose an amount you can afford and invest it regularly, regardless of the price of the asset. This has the potential to "average out" the cost of purchases over time and reduce the overall impact of a sudden drop in price on any given purchase. If prices do drop, DCA investors can continue to buy as planned and potentially reap the rewards when prices recover.