L'INFORMATEUR CRYPTOHome › Glossary › DCA (Dollar Cost Averaging)
DCA (Dollar Cost Averaging): definition
DCA means investing a fixed amount at regular intervals, whatever the price, to smooth out your average purchase price.
Definition
With DCA, you buy for example €100 of Bitcoin every week. When the price falls, you buy more units; when it rises, fewer. Your average price smooths out.
Benefits and limits
- Removes the question of the “right time” to enter.
- Reduces the emotional impact of volatility.
- Less effective than a single purchase at the bottom, but nobody knows the bottom in advance.
Frequently asked questions
Does DCA work on altcoins?
It smooths the entry price, but doesn't protect against a project that keeps losing value: it's best suited to assets you believe in for the long term.