DCA Crypto: Crash Course

1. What is Dollar-Cost Averaging (DCA)?

Ever hear someone talk about “DCA” and think, What’s the big deal? or maybe, Why should I care? Don’t worry, I’ve got you.

Dollar-Cost Averaging, or DCA, is one of the easiest and most reliable ways to invest without needing to be a stock market wizard. Here’s the gist: with DCA, you invest a fixed amount of money on a regular schedule, regardless of what’s happening with the price. That’s it. No fancy formulas, no trying to “buy low and sell high.” Just simple, steady investing.

The Power of DCA, Simplified

Imagine you’re buying Bitcoin every month—maybe $100 each time. When prices are low, your $100 buys you a bigger slice of Bitcoin; when prices are high, it buys a smaller slice. This simple act of investing the same amount each time does something clever: it averages out your purchase price over time.

And the best part? It turns the market into a piggy bank. Your money gets to work without you having to micromanage, guess market trends, or worry about whether you’re buying at the “perfect” time.

Why Use DCA?

Because DCA keeps things simple and lets you stay calm—something most people struggle with in investing. Instead of freaking out over every price drop or getting swept up in market hype, DCA helps you focus on the long game.

It’s not about “timing the market.” Instead, it’s about building a solid portfolio without having to constantly second-guess yourself. And as long as you’re putting your money into good assets—think Bitcoin, Vanguard ETFs, blue-chip stocks—DCA helps you get more of the upside over time.

Ready to dive in? In the next page, we’ll explore why “averaging” is so effective, especially if you want to avoid emotional investing and actually stick to a strategy that works.

2. Why DCA Strategy Is So Effective

Alright, so we’ve established that DCA means putting in the same amount of money regularly, no matter what the price is doing. But why is this “averaging” part such a game-changer?

DCA Keeps You Cool

Let’s face it: markets are a rollercoaster. Prices go up, prices go down, and your brain starts screaming, “Sell!” or “Buy more now!” DCA takes the drama out of the equation. Instead of reacting to every swing, you stick to a plan and invest consistently, rain or shine.

This strategy keeps you from making the classic mistake: buying high and selling low. By averaging your costs over time, DCA lets you buy more when prices dip and less when they surge.

Does DCA Actually Make Money?

I once explained DCA to a young crypto YouTuber, and he asked:

“How can I make money with it?”

It was a funny moment, but it made me realize that I might be too deep into the topic to resonate with beginners. So here’s the answer:

The stock market grows on average over 10% a year, and Bitcoin grows even faster. Making money on the market can be really easy: just buy Bitcoin or the S&P 500 and hold it. Done.

If you want to play around with some fun calculations, open an account at Deltabadger and use our calculator.

So, does DCA makes money? The short answer: yes, it can. The stock market has historically grown around 10% per year, and Bitcoin? Well, it’s been even wilder (in a good way). By consistently buying over time, you catch the market’s growth without stressing about whether today’s price is “right.”

The key is that DCA is about capturing the average over time. You’re not trying to hit a home run on one big buy; instead, you’re aiming for slow, steady growth—think tortoise over hare.

Of course, this doesn’t mean DCA is a magic bullet. If you invest in bad assets, DCA won’t save you. That’s why it’s crucial to choose reliable assets—Bitcoin, S&P 500, maybe a few solid ETFs—and avoid anything too flashy.

Let’s summarise typical reasons why investors fail. Avoid these, and you’re ahead of the game. Ready?

If you’re planning to buy some meme coins, well, I can’t help you there. Sometimes you need to get burned to learn. For everything else on the list? The answer is dollar-cost averaging.

Consistency Beats Market Timing

In the end, DCA works best when you keep at it. It’s the easiest strategy to stick to because it’s simple and low-stress. Set it up, automate it if you can, and let it run.

On the next page, we’ll look at how to get started with DCA and build a solid, reliable portfolio—one that you won’t need to babysit.

3. How to Start with DCA

Now that you know the why behind DCA, let’s dig into the how. It’s all about picking the right assets, setting up a consistent schedule, and letting the magic of averaging work for you.

Step 1: Choosing the Right Assets

The first rule? Keep it simple. DCA is most effective when you’re investing in strong, proven assets. Think Bitcoin, broad market ETFs like the S&P 500, or “blue-chip” stocks. These are the kinds of investments that tend to grow over time and are less likely to disappear overnight.

If you’re tempted by the latest meme coin or a “hot” new stock, consider this your friendly reminder: stick to reliable assets in your main portfolio. As the saying goes, “Boring is beautiful.” You want investments that can withstand the test of time, not just the hype of the month.

Step 2: Set Up Your Schedule

This part is simple. Decide how often you want to invest: daily, weekly, or monthly. Guess what? It doesn’t make a huge difference in the long run. The key is consistency. Set a schedule you can stick to and automate it if possible, so you’re not relying on willpower every time.

Step 3: Start Small and Build Up

Especially if you’re new to investing, there’s no need to jump in with huge amounts. Start with an amount you’re comfortable with, get into the rhythm, and see how it feels. Over time, you can always increase it.

Step 4: Automate and Forget (Mostly)

One of the best parts of DCA is that you don’t have to micromanage. Many platforms (like ours!) let you set up automated DCA, so your money is put to work without you lifting a finger. Set it up, and let it do its thing—just remember to check in every now and then to make sure your investments still align with your goals.

On the next page, we’ll dive into how to build a balanced portfolio with DCA and why diversifying beyond crypto can make all the difference.

4. Building a Balanced Portfolio with DCA

DCA is a powerful tool, but it becomes even stronger when combined with a balanced portfolio. Here’s the secret sauce: don’t put all your eggs in one basket. A well-diversified portfolio helps you ride out market swings and protect your gains over time.

The Case for a “Lazy Portfolio”

A lazy portfolio is exactly what it sounds like—a set-it-and-forget-it approach that doesn’t need constant adjustments. You don’t need to chase trends or watch the market every day. Instead, you create a mix of different assets that balance each other out.

Here’s a simple formula to get started:

• 70% in a broad market ETF (like the S&P 500): This gives you exposure to a diversified set of stocks.
• 20% in Gold: A classic hedge against inflation and economic instability.
• 10% in Bitcoin: A growth asset that has shown serious long-term potential.

This kind of mix offers both stability and growth potential. Stocks provide steady gains, gold acts as a safety net, and Bitcoin adds a touch of spice with its high growth potential.

Wait a second… is this still a “DCA crypto” guide? Yes. And here’s my most serious recommendation for you that will save you on your investing journey. There was a time when Bitcoin was an explosive new asset with the potential to grow 1000x, and going all-in was a gamble believers were willing to take. That time is over. Bitcoin and maybe Ethereum are now integral parts of global finance, still boasting huge growth potential, but no other altcoin comes close. Building a crypto-only portfolio in 2024 is not a good strategy.

Another bad strategy? Not having Bitcoin in your portfolio.

Why Diversification Matters

Here’s the deal: crypto and stocks don’t always move in the same direction. When one is down, the other might be up. By diversifying across different asset classes, you reduce the risk of your entire portfolio dropping at once.

And remember—diversification isn’t about buying 10 different cryptocurrencies. Most crypto assets are highly correlated, meaning they move together. That’s why it’s better to spread your investments across truly different types of assets.

Keep It Simple, Keep It Consistent

If you’re using DCA, consistency is your superpower. By investing the same amount into this mix regularly, you’re building a solid foundation without stressing over every market move.

On the next (and final) page, we’ll wrap things up with some final tips and helpful resources to keep you on track.

5. Final Thoughts & Resources

Congratulations! You’re now equipped with the essentials of Dollar-Cost Averaging and building a solid, stress-free portfolio. Let’s wrap up with a few final tips to keep your DCA journey on track and some resources to help along the way.

DCA in a Nutshell

To recap, DCA is all about consistency, simplicity, and patience. By regularly investing the same amount over time, you smooth out the highs and lows of the market. It’s not about making flashy moves; it’s about creating a long-term strategy you can stick to.

1. Choose Strong Assets: Stick with reliable investments like Bitcoin, the S&P 500, or a lazy portfolio mix.
2. Set It and Forget It: Decide your schedule and automate it if you can. Don’t overthink it—DCA works best when it’s consistent.
3. Diversify: Balance your portfolio with uncorrelated assets like stocks, gold, and Bitcoin to reduce risk.

Common Pitfalls to Avoid

Here are a few common mistakes people make with DCA and how you can avoid them:

• Jumping on Trends: Stick to your strategy instead of chasing the “next big thing.” Your portfolio should be built for the long haul.
• Panicking in Downturns: DCA works through both good and bad times. Keep investing even when prices drop—it’s part of the process.
• Overcomplicating: DCA’s power is in its simplicity. Avoid overanalyzing or trying to time the market.

Resources to Keep You on Track

• Deltabadger DCA Bot: Automate your DCA into crypto (and soon, stocks) with ease. Try our DCA bot
• DCA Calculator: Curious to see how much you could build over time? Use our DCA Millionaire Calculator.
• Further Reading: Check out books like The Intelligent Investor by Benjamin Graham or MONEY: Master the Game by Tony Robbins for deeper insights.

Ready to Start?

You now have everything you need to make DCA work for you. Set up your plan, stay consistent, and let the power of averaging take care of the rest. Here’s to building a portfolio that lets you sleep easy at night—one steady investment at a time.

FAQ

Q: Should I DCA Monthly, Daily, or Only on Monday?

There is a lot of misleading information on the internet about the best schedule or day for dollar-cost averaging. The truth is, long term it doesn’t matter. At Deltabadger, we performed many tests, and the longer the schedule, the more negligible the difference. The whole difference often comes from the very beginning: if the asset dropped rapidly right after you bought, it was better to go in slowly, but if it immediately went up, it was better to start with a bigger chunk. You don’t know what will happen, so don’t worry about it. The longer you DCA, the smaller the difference.

Q: Is DCA Better Than Investing a Lump Sum?

For most of us, this is only theoretical. Most investors don’t sit on large sums of cash but grow their portfolio slowly by investing a little bit from every paycheck—this is already averaging whether you want it or not. However, you can still mess it up if you always chase trendy assets or stop investing when prices drop.

Set your schedule and stick to it. If you decide to invest weekly, invest weekly! One way to make it easier is starting our free bot. You can already do it for crypto, and soon also for stocks with IKBR. If you have a large sum, DCA reduces the risk of poor timing and helps you avoid emotional decisions. Start a DCA bot and invest the amount over a year or two.

Q: What Are the Blue-Chip Cryptos?

There are no “blue chip” cryptos besides Bitcoin and Ethereum. Just look at how the top 10 cryptocurrencies have changed over the last 11 years.

Year	1	2	3	4	5	6	7	8	9	10
2014	BTC	LTC	XRP	PPC	DOGE	NXT	NMC	MSC	DRK	BLK
2015	BTC	XRP	LTC	DASH	XLM	DOGE	NXT	BTS	MAID	BANX
2016	BTC	ETH	XRP	LTC	DASH	MAID	DOGE	DGD	XEM	STEEM
2017	BTC	ETH	XRP	XEM	LTC	DASH	ETC	BCN	XLM	XMR
2018	BTC	ETH	XRP	BCH	EOS	LTC	ADA	XLM	TRX	IOTA
2019	BTC	ETH	XRP	BCH	LTC	EOS	BNB	USDT	XLM	ADA
2020	BTC	ETH	XRP	USDT	BCH	BSV	LTC	BNB	EOS	XTZ
2021	BTC	ETH	USDT	ADA	BNB	XRP	DOGE	USDC	DOT	UNI
2022	BTC	ETH	USDT	BNB	USDC	SOL	XRP	ADA	LUNA	AVAX
2023	BTC	ETH	USDT	BNB	USDC	XRP	ADA	DOGE	MATIC	SOL
2024	BTC	ETH	USDT	BNB	SOL	USDC	XRP	DOGE	TRX	TON

Q: Is DCA into crypto still worth it in 2024?

If you’re looking for “1000X gains,” buy a lottery ticket. Your chances are similarly small, but at least you cap how much you can lose. The million-dollar Bitcoin is still ahead of us, but not next year. Bitcoin can absolutely be a big part of long-term success.

Q: What is DCA in crypto?

DCA, or Dollar-Cost Averaging, is an investment strategy where you invest a fixed amount in a cryptocurrency at regular intervals, regardless of its price. This helps reduce the impact of market volatility. Learn how our DCA bot for Crypto simplifies this process for you.

Q: Is DCA a good investment strategy?

Yes, DCA is the most recommended investing strategy for retail investors in any market, especially in volatile markets like crypto.

Q: How does DCA work in crypto?

Although DCA comes from the stock market, it works even better for crypto because of its divisibility and access to APIs. This allows you to easily start a bot and automate DCA into any crypto asset.

Q: What are the benefits of DCA?

Here are five key benefits of DCA:

• Reduces risk of bad timing: You’re not reliant on market highs or lows.
• Builds discipline: Encourages consistent investment habits.
• Simplifies investing: No need to analyze the perfect entry point.
• Reduces emotional decisions: Removes fear and greed from the equation.
• Suitable for beginners: Easy to understand and implement.

Q: How often should you DCA?

The frequency of DCA depends on your financial situation and goals. Common intervals are weekly, bi-weekly, or monthly. For example, our DCA bot for Crypto lets you automate these intervals for optimal convenience.

Q: Is DCA profitable?

DCA is as profitable as the asset you invest in. If you pick the wrong asset, it won’t save you. Pick the right one, and it’s the easiest path to investing success.

Q: What is DCA zone in crypto?

The “DCA zone” refers to a price range where investors consistently buy crypto using the Dollar-Cost Averaging strategy. However, we don’t encourage it as it assumes you know which price is “too high.” DCA mitigates that uncertainty.

Q: How do I use DCA in crypto?

To use DCA, decide on an investment amount, choose a crypto asset, and set a regular schedule for purchases. Tools like our DCA bot for Crypto make this process fully automated and stress-free.

Q: What is DCA for dummies?

DCA is just saving where the market is your piggy bank. You pick your investing asset and regularly buy some. You avoid taking big risks while the market puts your money to work.

Q: Is DCA crypto worth it?

Yes, every invested dollar builds your financial future. If you’re still unsure, start small and grow your contributions as you become more confident.

Q: Is DCA good for the future?

Yes, it is. If you’re still worried, simply start with a smaller sum. The previous best time to start DCA was yesterday. The next best time is today.

Q: Which crypto exchange is best for DCA?

The best exchanges for DCA are those with low fees and support for automated purchases, such as Binance, Coinbase, and Kraken. Pairing them with our DCA bot for Crypto enhances your experience by cutting costs and adding convenience.

—

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investing involves risks, including the possible loss of principal. Always conduct your own research before making investment decisions.