Dollar Cost Average

      DCA is the acronym for Dollar Cost Averaging

      Dollar Cost Averaging is a method of investment that helps control risk while gaining exposure to an asset class. Typically whenever people think about investment they look at it as a one time in and out process. DCA is taking an amount and investing over a time frame rather than just all at once.

     DCA schemes work in an extremely simple way; Every X amount of time an investor puts in X amount of money. So, if Allen has $25,000 and wants to buy Bitcoin at its price of $10,000 he would get 2.5 BTC. However Mary also has $25,000 and she wants to invest it all into Bitcoin. So she decides to buy $5,000 worth every week for the next 5 weeks. Weeks 1 & 2 Bitcoin is at 10,000; so Mary now has 1BTC & $15,000. Week 3 the Price dives to $9,000, so now with her $5,000 she buys 0.5555 BTC. Next week Bitcoin is at $9,500 and she buys 0.5263 BTC. At the end of Week 5 Bitcoin jumps to $10,200. She Buys 0.4901 BTC to bring her last 3 weeks to 1.5719BTC added with her 1BTC from before bring her balance to 2.5719 BTC. 

Now a quick recap:
Allen – $25,000 – 1x – 2.5BTC
Mary -$25,000 – 5x – 2.5719BTC

Mary has 2.876% more Bitcoins than Allen does and therefore will always be ~3% more wealthy than him.

      Related Terms:



BTC: bc1qcskmel9llhrdqj3arxyqnennx4ashvfutlreyy
LTC: ltc1qa0fj4lcu5365rep50aza5fqqvx8ef0afemh6s5
ETH: 0x071D72dbc48ad2Fe35daE256eCF0834C5dde688c
DASH: XgXHqVyJiQNdVVszH9cnqCP4uWcP8tVxdK
BNB: bnb1mau4j8kry0jgw45ufy69hvhd0k04llet8fk2p6

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