Actively investing in crypto and crypto trading can be mentally demanding and time consuming. Plus, you don’t even have a guarantee that the time you have to devote to it will lead to success. Fortunately, there are also other passive ways of investing and trading without having to be constantly involved. An excellent example of this is Dollar Cost Averaging (DCA). So, what is Dollar Cost Averaging and how does it work? You will learn everything about DCA in this article.

In addition to our automated trading, there are other strategies to passively build a long-term portfolio. An example of this is the Dollar-Cost Averaging (DCA) strategy. With a DCA strategy, you build positions by regularly investing an amount of money, regardless of the price of the asset. Investing money regularly can be done at intervals of weeks, months or even years.

With DCA, you therefore periodically buy a huge amount of a certain asset, such as Bitcoin. The idea behind this approach is to reduce risk when buying investments by taking the purchase price of those investments as an average.

This strategy is often used by investors who are uncomfortable with trying to time the market, but still want to take advantage of its potential upside. The fixed amount invested is usually spread out evenly over a predetermined period, such as weekly or monthly. In this way an investor can minimize their exposure to risk by not having to worry about timing the market perfectly, but still benefits from any potential gains.