DCA is short for Dollar Cost Averaging.
This is an investment strategy used by cryptocurrency investors who HODL, or hold a crypto, for longer term gains.
Under DCA, a fixed dollar amount of Bitcoins, or the chosen cryptocurrency, is bought at regular intervals, regardless of whether the price is high or low at that time.
When the price is low, the fixed amount invested would fetch more cryptos, while the same amount would buy only less cryptos when the price is high.
The DCA strategy would give crypto investors peace of mind as they do not have to worry about the highly volatile cryptocurrency prices. This is most suited for cautious and new investors who are hesitant to make an entry.
That said, DCA also presents the risk of missing out on good opportunities to buy and sell a crypto as the investments are timed.
An example: Under a DCA strategy, an investor invests $100 at the very first day of a month. On January, the investment fetched him 10 Bitcoins when the price of a bitcoin was $10. In February, the same amount of invested bought only 5 Bitcoins as the price of a Bitcoin had doubled to $20.
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by Jyotsna V