How dollar-cost averaging works
You commit a fixed sum on a fixed schedule — $200 every Monday, say — and buy whatever that sum gets you at the price on the day. When the price is low the money buys more coins, when it is high it buys fewer. Over enough buys your average price lands below the average market price, which is the whole point.
total coins = sum of every period's coins
average price = total contributed ÷ total coins
The mechanical advantage is real but small. The bigger benefit is behavioural: a schedule removes the decision, and removing the decision is what stops people from buying the top out of excitement and refusing to buy the bottom out of fear.
What a two-year plan looks like
$200 a month for 24 months, starting at $40,000 with the price grinding up 1.5% a month:
| Total contributed | $4,800.00 |
|---|---|
| Coins accumulated | 0.10312 |
| Average price paid | $46,548 |
| Final price | $56,993 |
| Value at the end | $5,876.61 |
Note the average paid sits between the start and end price, not at the start. That is the cost of buying on the way up — and the mirror of the benefit you get on the way down.
Choosing an interval
Weekly, fortnightly and monthly all produce similar long-run results. The differences that actually matter are elsewhere:
- Fees. A flat fee per buy hurts a small weekly contribution far more than a larger monthly one. If your exchange charges a fixed amount, buy less often.
- Payday alignment. A schedule you can fund without thinking is a schedule you will keep. That beats an optimal interval you abandon.
- Automation. Recurring buys remove the temptation to skip a week because the chart looks bad. Skipping the bad weeks defeats the strategy entirely.
Where DCA does not help
Dollar-cost averaging spreads out timing risk. It does nothing about the asset being wrong. A coin in a permanent decline will average you down all the way to zero, patiently and on schedule. Spreading purchases over time is not a substitute for deciding what you want to own — and if you want to see where a set of unplanned buys has left you already, the average price calculator is the tool for that.
Common questions
What is DCA in crypto?
Dollar-cost averaging means investing a fixed amount on a regular schedule instead of putting a lump sum in at one moment. It spreads your entry across many prices.
Is DCA better than a lump sum?
Historically lump sums win more often in markets that rise over time, because money invested earlier compounds longer. DCA reduces the risk of a badly timed single entry, which is why many people prefer it in volatile assets.
How often should I buy?
Weekly and monthly give very similar long-run results. Pick whichever fits your income schedule, and buy less often if your exchange charges a flat fee per trade.
Does the calculator predict future prices?
No. The growth rate is an assumption you supply so you can compare scenarios — a flat market, a steady climb, a slow bleed. It is not a forecast.
Can I model a falling market?
Yes. Enter a negative percentage for the price change per period and you will see how the plan performs in a downtrend.