Dollar cost averaging is a super simple method for both beginner and seasoned investors to regularly grow their investments over time. How? By investing small, incremental amounts on a regular, consistent basis. (Such as every day, week, or month – automation is your friend here!)
Dollar cost averaging involves investing slowly – spreading your investments out at different price points. For example, if you get paid weekly, you can invest $20 into crypto each week when you get your paycheck – regardless of how low or high the market is on that day. Consistency is key here -- think of dollar cost averaging as investing on auto pilot. This means that over time, you’ll be buying through bear markets -- when the prices are low -- and bull markets -- when the prices are high. Your DCA is the average of all your investments – from your bear market dippity dips to your peakity peak bull market moments. And because you’re investing consistently, your purchases average out. It’s a win/win.
Dollar cost averaging is a popular way to combat bear markets – because it makes it easy to keep you invested and on-track! We recommend utilizing dollar cost averaging if you’re an emotional investor, get nervous during dips, or tend to invest less during bear markets. (It’s human, we get it!)
Bits makes it simple to automate your crypto investments on a daily, weekly, or monthly basis - so you don’t have to be glued to your phone or keep checking on the market. And because your dollar cost averaging can be automated with Bits, you don’t have to worry about signing up for exchanges or wallets – making it easy to get started. You don’t have to worry about whether the markets are high or low. Because let’s face it – it can be volatile out there! Bits has no sign-up costs, no monthly subscriptions, and no commission fees.
It's hard to predict the bottom of a bear market or the top of the bull market. Save yourself some stress and DCA your way through it with these helpful hints to make DCA to be the most effective:
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