What is Dollar-Cost Averaging (DCA)?

Dollar-Cost Averaging is an investment strategy where you invest a fixed amount of money at regular intervals, regardless of the asset's price. This approach helps reduce the impact of volatility and removes the emotional decision-making from investing.

How DCA Works

Fixed Amount: You invest the same dollar amount each period (e.g., $100 every week)
Variable Quantity: When prices are low, you buy more tokens; when prices are high, you buy fewer
Average Cost: Over time, your average purchase price smooths out, reducing timing risk

DCA vs. Lump Sum

Studies show that lump sum investing often outperforms DCA in rising markets because your money is invested longer. However, DCA has psychological benefits:

Reduces regret from bad timing
Easier to commit to a savings plan
Performs better in volatile or declining markets
Removes emotional decision-making

Important Notes

This simulator uses historical data—past performance doesn't guarantee future results
Real-world results would include exchange fees and slippage
Tax implications vary by jurisdiction—consult a tax professional
Cryptocurrency investments are highly volatile and risky

Related Tools

Crypto ROI Calculator — Calculate returns on a single investment using live prices
Position Size Calculator — Size each DCA purchase based on risk tolerance
Fear & Greed Index — Time your DCA entries using market sentiment data
Bitcoin vs M2 Money Supply — Understand macro trends that affect accumulation strategies
Crypto Asset Explorer — Research assets before adding them to your DCA plan

Historical price data from DefiLlama. Past performance does not guarantee future results.