DCA (Dollar Cost Averaging) is a fixed-amount recurring investment strategy that involves buying a predetermined sum at regular intervals regardless of market price. A case study shows that an investor who started a weekly DCA on bitcoin on November 10, 2021, at the all-time high of $68,982, significantly outperformed a lump-sum buyer despite a 77% crash and a market cap decline of over $2 trillion after FTX’s bankruptcy. With bitcoin around $78,000 by late August 2026, the lump-sum purchase from November 10, 2021 gained only 13% in nearly five years, while the DCA smoothed the cost basis downward throughout the entire downturn. The strength of DCA lies in its psychological dimension: by removing decision-making and therefore emotion, the strategy avoids euphoric buying at the peak and panic selling at the bottom. Its limitations remain real: it does not turn a bad asset into a good investment, and fixed fees can weigh heavily on small recurring amounts.
Source: Read the original article
