defi Term
What is Dollar-Cost Averaging (DCA)?
An investment strategy of allocating fixed dollar amounts into an asset at regular intervals regardless of price.
Detailed Definition & Context
Dollar-Cost Averaging minimizes the impact of market volatility by automatically buying more units when prices are depressed and fewer when prices are elevated. It removes emotional timing risk.
Practical Example
Investing $50 every Monday morning into Bitcoin over 3 years instead of investing a $7,800 lump sum on day one.
Related Concepts
ROIDrawdown
Interactive Tool
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Model recurring crypto buys to see how DCA mitigates volatility over time.