DCA: meaning and features

Investing a little bit every day, known as dollar-cost averaging (DCA), can be beneficial because it allows for the reduction of the impact of short-term price fluctuations.

The price of cryptocurrency can change significantly within a day or a week, and therefore, if investments were made at one point in time, it could lead to significant losses or inadequate returns.

Essentially, DCA is a solution to the "market entry" problem that arises when attempting to time the purchase of an asset. It allows for less focus on price and minimizes the influence of one factor.

By using DCA, price fluctuations can be smoothed out, as different volumes will be purchased at different prices, but the total invested capital will be evenly distributed. This also increases the likelihood of achieving average returns.