Is Dollar-cost Averaging the Best Way to Create a Bitcoin Portfolio?


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Approaching financial markets needs to be done safely and securely. For newcomers, it is often best to start small. Dollar-cost averaging is a powerful tool, especially where Bitcoin and other cryptocurrencies are concerned. 

The Benefits of Dollar-Cost Averaging Bitcoin

Buying a full Bitcoin gradually becomes more expensive. The world’s leading cryptocurrency is scarce, and the higher its price goes, the less BTC are available for purchase. As such, it is often better to buy small amounts of Bitcoin regularly. This process is known as dollar-cost averaging, or DCA. It is an advantageous method when building a cryptocurrency portfolio. 

Far Less Emotional Attachment

One thing traders need to keep in mind is how Bitcoin is a rollercoaster. Its price will go up and down nearly every hour of the day. For traders, letting emotions cloud one’s judgment is often problematic. With dollar-cost averaging, there is no “emotional connection” to recurrently buying Bitcoin. It is an automated process that requires no decision-making. 

Timing Is Less Of an Issue

With a volatile asset such as Bitcoin, timing trades is crucial to maximizing profit potential. Not everyone can stomach the idea if watching price charts several hours a day. As such, dollar-cost averaging removes the timing component from the equation. Every small investment changes the average price paid per purchase. Timing is an irrelevant factor at this point. 

Convenience Despite Commitment

The main draw of dollar-cost averaging is the ability to grow one’s portfolio over time. With Bitcoin buying smaller pieces of a full BTC will help achieve that goal. It is a passive and convenient investment option that only needs to be set up once. You can cancel this recurring payment commitment at any time. 

Possible Downsides to the DCA Method

No investment method is foolproof; otherwise, every trader would be a millionaire by now. Dollar-cost averaging is a reliable and justifiable approach, but it will not necessarily help traders maximize their portfolio’s potential. 

Bullish Markets Aren’t Always Good

When investing in any asset, the ultimate goal is to see its value go up. When that happens, the value of the portfolio’s allocation to that asset will increase. With Bitcoin, however, there is a very likely chance its price will keep rising. As such, dollar-cost averaging only yields small returns than investing one big sum of money at once. 

It Won’t Make You a Good Trader

Even though dollar-cost averaging is a respected trading method, it will not help users make sound decisions. It is always possible to invest in the wrong market, even when setting up smaller recurring investments. Nor does this method negate market volatility or dealing with unreliable brokers and exchanges. It is a powerful tool, but one that can only be useful in combination with proper research. 


For those who do not have Bitcoin in their portfolio yet, dollar-cost averaging may be the way to go, Especially now that one BTC costs over $20,000, the time has come to make smaller commitments. If one firmly believes Bitcoin is the future, buying any amount today will be a smart investment.

As is always the case, there is no guarantee for profit or success. Conduct your research before making any financial contribution, be it Bitcoin or something else entirely. 

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