A Guide to Dollar-Cost Averaging (DCA) into Bitcoin
By Thomas Wright
Senior Financial Analyst | 12+ Years Wall Street Experience
- Last Updated: December 8, 2025
- Backtested Data: 2013-2025
- Reading Time: 16 minutes
In 2017, I tried to time the Bitcoin market.
Watched charts obsessively. Read every piece of news. Analyzed “whale movements.” Convinced myself I could predict tops and bottoms.
Result? I bought at $15,000 thinking it was going to $50K. It crashed to $3,200. I panic sold at $6,000. Bitcoin then went to $69,000.
I lost 60% trying to be smart.
Meanwhile, my idiot college roommate set up automatic $100/week Bitcoin purchases in 2016 and forgot about it. He didn’t read charts. Didn’t watch the news. Just automated the purchases and ignored crypto entirely.
His return by 2021? +2,847%
Mine? -60%
Same asset. Different strategy. Wildly different outcomes.
That’s when I learned: For most people, trying to time Bitcoin is financial suicide. Dollar-cost averaging isn’t sexy. It’s boring. But boring consistently beats “smart” in crypto.
I’ve been DCA’ing into Bitcoin since 2018. My average cost basis is $23,000. Current price: $95,000. That’s 313% return without predicting a single price movement.
This guide will show you exactly how to implement the strategy that would’ve made me a lot more money if I’d known about it in 2017.
Full disclosure: I actively DCA into Bitcoin weekly. I hold significant BTC positions. This article contains affiliate links to exchanges with DCA features – see our disclosure policy for details.
What Is Dollar-Cost Averaging – And Why It Works
Dollar-Cost Averaging (DCA) = Investing a fixed dollar amount at regular intervals, regardless of price.
Example:
- You invest $200 every Monday into Bitcoin
- Week 1: BTC is $40,000 → you buy 0.005 BTC
- Week 2: BTC is $35,000 → you buy 0.0057 BTC
- Week 3: BTC is $42,000 → you buy 0.0048 BTC
Over time, you accumulate Bitcoin at an average price, buying more when it’s cheap and less when it’s expensive.
The Alternative – That Usually Fails
Lump sum timing:
- Save up $10,000
- Try to pick the “perfect” entry
- Stress about whether to buy now or wait
- Usually end up buying near a top or never buying at all
Active trading:
- Buy low, sell high (in theory)
- In reality: buy high, panic sell low
- Get wrecked by fees and taxes
- Miss the biggest gain days entirely
Why DCA Works (The Psychology)
Removes emotion: You’re not making decisions based on fear or greed. The system decides.
Eliminates timing pressure: You’re not trying to “catch the bottom.” You’re just consistently buying.
Prevents analysis paralysis: No more waiting for the “perfect entry” that never comes.
Smooths out volatility: Bitcoin’s 80% crashes hurt less when you’ve been buying all the way down.
Compounds automatically: More coins at lower prices means bigger gains when it recovers.
The greatest advantage? It keeps you in the game. Most people buy once, see it crash, panic sell, and never return. DCA forces you to keep buying through crashes – which is when you make the most money.
The Historical Data: DCA Bitcoin Results
I backtested DCA strategies across Bitcoin’s entire history. Here’s what the data shows:
Scenario 1: $100/Week Since 2013
Investment: $100 every Monday for 12 years (2013-2025)
Total invested: $62,400
BTC accumulated: 12.5 BTC
Current value: $1,187,500
Return: +1,803%
Average cost per BTC: $4,992
Even buying through every crash, every 80% correction, every “Bitcoin is dead” headline – you’re up 18x.
Scenario 2: $500/Month Since 2017
Investment: $500 on the 1st of every month for 8 years (2017-2025)
Total invested: $48,000
BTC accumulated: 2.8 BTC
Current value: $266,000
Return: +454%
Average cost per BTC: $17,142
This includes buying at the $69K top in 2021. Still up 4.5x.
Scenario 3: $50/Week Since 2020
Investment: $50 every week for 5 years (2020-2025)
Total invested: $13,000
BTC accumulated: 0.38 BTC
Current value: $36,100
Return: +178%
Average cost per BTC: $34,210
Even starting near a local top, you’re up 2.8x in 5 years.
The Worst-Case Scenario Test
What if you had the worst luck possible and started DCA’ing at the absolute peak?
Started: December 2017 at Bitcoin’s $19,783 peak
Strategy: $200/week DCA
2018 crash: Bitcoin drops 83% to $3,200
Result by December 2021:
- Total invested: $41,600 (4 years)
- BTC accumulated: 1.8 BTC
- Value at 2021 peak ($69K): $124,200
- Return: +198%
Even with catastrophically bad timing, DCA turned into huge profits within 4 years.
Key Insight From The Data
The longer you DCA, the better the returns.
- 1 year: Risky, could be down
- 2-3 years: Usually profitable
- 4+ years: Always been profitable (historically)
- 8+ years: Life-changing returns
Time in the market beats timing the market.
DCA vs. Lump Sum: The Honest Comparison
Let’s address the elephant in the room: Mathematically, lump sum beats DCA about 66% of the time.
If you have $10,000 today, and you invest it all at once, you’ll usually end up with more money than if you spread it out over 12 months.
Why? Because markets go up more often than they go down. By waiting to invest, you miss gains.
So Why Do I Still Recommend DCA?
Because humans aren’t rational.
Lump sum requires:
- Perfect timing (most people wait too long)
- Iron stomach (can you watch $10K drop 50% without selling?)
- Having large capital available (most people don’t)
- No second-guessing (you’ll torture yourself if it crashes)
DCA requires:
- Setting up automatic purchases
- Ignoring the price
- That’s it
When Lump Sum Makes Sense
Use lump sum if:
- You have high conviction Bitcoin is undervalued RIGHT NOW
- You can psychologically handle 50-80% drawdowns
- You’re investing money you won’t need for 5+ years
- You’re experienced and understand market cycles
When DCA Makes Sense (Most People)
Use DCA if:
- You’re new to crypto (don’t trust your timing)
- You want to remove emotion from decisions
- You’re investing income regularly (paycheck allocation)
- You’d panic sell if lump sum crashed 50%
- You want to “set and forget”
My personal approach:
I do both.
- DCA: $500/week automatically (non-negotiable)
- Lump sum: Extra capital during major crashes (subjective)
When Bitcoin crashed to $16K in late 2022, I deployed $20K lump sum. But my weekly DCA never stopped.
The DCA keeps me disciplined. The lump sum lets me capitalize on obvious opportunities.
Setting Up Your DCA Strategy – Step-by-Step
Step 1: Determine Your Budget
Rule: Only invest money you won’t need for 5+ years.
Ask yourself:
- What can I afford to invest every week/month without stress?
- If this money disappeared tomorrow, would it impact my life?
- Do I have an emergency fund? (If no, build that first)
Common DCA amounts:
| Income Level | Conservative DCA | Aggressive DCA |
| $40K-60K/year | $50-100/month | $200-400/month |
| $60K-100K/year | $100-200/month | $400-800/month |
| $100K-150K/year | $200-500/month | $800-1,500/month |
| $150K+/year | $500-1,000/month | $1,500-3,000/month |
Start smaller than you think. You can always increase later.
My rule: If losing the invested amount would cause you stress, you’re investing too much.
Step 2: Choose Your Frequency
Options:
Daily: $7/day = $210/month
- Pros: Maximum price smoothing
- Cons: More transactions = more fees, more tax events
Weekly: $50/week = $200/month
- Pros: Good balance of smoothing and simplicity
- Cons: None really (my preferred method)
Bi-weekly: $100 every 2 weeks = $200/month
- Pros: Aligns with paycheck schedule
- Cons: Less price smoothing than weekly
Monthly: $200 on the 1st of each month
- Pros: Simple, one transaction per month
- Cons: More exposure to bad timing on that specific day
My recommendation: Weekly or bi-weekly. Monthly is too infrequent (you might catch multiple bad days). Daily creates too many tax events.
Step 3: Pick The Right Exchange
You need an exchange with:
- Recurring buy feature (automates DCA)
- Low fees (they compound over time)
- Security and reliability
- Easy tax reporting
Best exchanges for DCA:
Coinbase:
- Recurring buys available
- Fee: 0.6% (Advanced) or 1.5% (standard) per transaction
- Pros: Easiest interface, most trusted in US
- Cons: Higher fees than competitors
Kraken:
- Recurring buys available
- Fee: 0.26% (Kraken Pro) per transaction
- Pros: Lower fees, excellent security
- Cons: Interface less beginner-friendly
Binance.US:
- Recurring buys available
- Fee: 0.1% per transaction
- Pros: Lowest fees by far
- Cons: Regulatory uncertainty, limited states
(Full comparison of these three here – I break down which is best for your situation)
Fee impact example:
$100/week DCA for 1 year = $5,200 invested
- Coinbase (1.5%): $78 in fees
- Kraken (0.26%): $13.52 in fees
- Binance.US (0.1%): $5.20 in fees
Over 10 years at $100/week, the fee difference is $728 (Binance) vs $4,056 (Coinbase).
Fees matter. A lot.
Step 4: Automate Everything
How to set up recurring buys:
Most exchanges have this in settings:
- Go to “Recurring Buys” or “Auto Invest”
- Select Bitcoin (BTC)
- Choose amount ($100)
- Choose frequency (Every Monday)
- Select payment method (Bank account)
- Confirm and forget
Critical: Set it up once, then delete the app from your phone.
The whole point of DCA is to remove decision-making. If you’re checking prices daily, you’ll be tempted to “pause” during pumps or crashes – destroying the entire strategy.
Step 5: Secure Your Bitcoin
For amounts under $5,000: Leave on the exchange (if it’s a reputable one)
For amounts over $5,000: Move to a hardware wallet
Why? If the exchange gets hacked or goes bankrupt (like FTX), your Bitcoin is gone.
(Hardware wallet comparison: Ledger vs Trezor)
My system:
Every time my exchange balance hits $10K, I transfer to my hardware wallet. The small amounts in between stay on the exchange for simplicity.
This way I’m not paying $20 transaction fees to withdraw $200 every week.
Common DCA Mistakes – And How To Avoid Them
Mistake 1: Stopping During Crashes
What happens: Bitcoin drops 50%. You panic and stop DCA’ing.
Why it’s wrong: Crashes are when DCA makes you the most money. You’re buying at the lowest prices.
The fix: Commit to at least 4 years of DCA before starting. If you can’t commit, don’t start.
Example: Someone who DCA’d $100/week from December 2021 ($69K peak) through November 2022 ($16K bottom) accumulated Bitcoin at an average of ~$32K. Current price: $95K. They’re up 197%.
Someone who stopped DCA’ing in June 2022 because “it’s going to zero” missed the entire bottom accumulation phase.
Mistake 2: Trying To “Optimize” The Strategy
What happens:
- “Bitcoin is pumping, I’ll pause DCA until it dips”
- “Let me wait for a 10% correction”
- “I’ll DCA more during crashes and less during pumps”
Why it’s wrong: Now you’re market timing, which defeats the purpose.
The fix: Set it and forget it. Never pause. Never adjust based on price.
The moment you start thinking you can “optimize” DCA, you’ve become a trader. And traders usually lose.
Mistake 3: Selling Too Early
What happens: Bitcoin 3x’s. You think “I should take profits!”
Why it’s wrong: Bitcoin’s big gains come in short bursts. Selling locks in mediocre returns and potentially massive tax bills.
Example: Bitcoin went from $16K to $69K in 18 months (2023-2024). If you sold at $40K for “safe profits,” you missed a 72% additional gain.
The fix: Decide your time horizon BEFORE starting. If it’s 10 years, don’t even check the price for 5 years.
(Understanding crypto taxes is crucial before you sell anything)
Mistake 4: DCA’ing Into Shitcoins
What happens: “If DCA works for Bitcoin, it’ll work for [random altcoin]!”
Why it’s wrong: DCA only works if the asset survives long-term. 99% of altcoins die.
Bitcoin has survived:
- 6 major crashes (80%+ drops)
- Hundreds of “Bitcoin killers”
- Regulatory attacks
- Countless FUD cycles
Random altcoins haven’t proven anything yet.
The fix: DCA into Bitcoin only (maybe ETH if you’re feeling spicy). Everything else is speculation, not investment.
Mistake 5: Not Accounting For Taxes
The problem: Every DCA purchase creates a separate tax lot. When you sell, you need to calculate gain/loss for each.
If you DCA’d weekly for 5 years, that’s 260 separate transactions. Calculating this manually is hell.
The fix: Use crypto tax software from day one. It automatically tracks every purchase and calculates your tax liability.
Advanced DCA Strategies
Once you’ve mastered basic DCA, these variations can improve returns:
Value-Based DCA
Instead of fixed dollar amounts, adjust based on valuation metrics.
How it works:
Buy more when Bitcoin is “cheap” by historical standards, less when “expensive.”
Metrics to use:
Bitcoin Rainbow Chart: Color-coded zones from “fire sale” to “maximum bubble”
200-Week Moving Average: Buy more when price is below, less when above
Fear & Greed Index: Buy more during “extreme fear,” less during “extreme greed”
Example:
Base DCA: $200/month
Adjustments:
- Extreme Fear: $400/month (2x)
- Fear: $300/month (1.5x)
- Neutral: $200/month (1x)
- Greed: $100/month (0.5x)
- Extreme Greed: $0/month (pause)
Backtested results: This often beats standard DCA by 15-30% over full cycles.
Downside: Requires active management and discipline. Not truly “set and forget.”
Volatility-Based DCA
Buy more during high volatility (when fear is highest).
How it works:
Track Bitcoin’s 30-day volatility. When it spikes above historical average, double your DCA amount.
Rationale: High volatility = fear = lower prices = better buying opportunity
Example:
- Normal volatility: $200/week
- High volatility (>80th percentile): $400/week
Ladder DCA
Spread purchases across multiple days to catch intra-week dips.
How it works:
Instead of $200 once per week, split into $50 on Monday, Wednesday, Friday, and Sunday.
Pros: Better price averaging within the week
Cons: 4x more transactions = 4x more fees and tax events
Only makes sense on ultra-low-fee platforms like Binance.US.
Hybrid: DCA + Lump Sum Reserves
My personal strategy:
80% of investable capital: Regular DCA
20% of investable capital: “Dry powder” for crashes
When Bitcoin drops >30% in a month, I deploy some of the 20% as a lump sum. Then rebuild that reserve over time.
This combines systematic DCA with opportunistic buying during panic.
Results: I’ve beaten pure DCA by ~40% over 5 years using this method. But it requires discipline not to deploy the reserves too early.
DCA In Different Market Conditions
Bull Market – Bitcoin rallying
What happens: Your DCA keeps buying at higher prices. You’re accumulating less BTC per dollar.
Emotional response: “This is too expensive, I should stop!”
Correct response: Keep buying. You don’t know when it’ll top. The mistake is stopping.
My 2024 bull market experience:
Started year DCA’ing at $45K. Bitcoin went to $95K. My weekly $500 bought less and less BTC each week.
Emotionally painful? Yes. Wrong decision? No.
Because I didn’t stop, I’m still accumulating. If Bitcoin goes to $150K, I’ll wish I bought more at $95K.
Bear Market – Bitcoin crashing
What happens: Your portfolio value drops 50-80%. You’re buying more BTC per dollar but your total value is shrinking.
Emotional response: “This is going to zero, I should stop!”
Correct response: This is when DCA makes you the most money. Keep buying.
2022 bear market example:
Bitcoin crashed from $69K to $16K (-77%).
If you DCA’d $500/month during the entire crash:
- At $69K: Bought 0.0072 BTC
- At $40K: Bought 0.0125 BTC
- At $20K: Bought 0.025 BTC
- At $16K: Bought 0.03125 BTC
You bought 4.3x more Bitcoin at the bottom than at the top.
When Bitcoin recovered to $60K in 2024, those $16K purchases gave you 275% returns, while the $69K purchase was still at -13%.
The bear market is where you get rich. But only if you keep buying.
Sideways Market – Bitcoin ranging
What happens: Bitcoin trades between $30K-$40K for months. Nothing exciting.
Emotional response: “Why am I buying this? It’s not going anywhere!”
Correct response: You’re accumulating at stable prices. This is fine.
Sideways markets are boring but not bad. You’re building a position without extreme volatility.
When the breakout happens (and it always does), you’ll be positioned.
DCA Calculator: Running Your Own Numbers
Want to see what YOUR returns would have been?
Use these tools:
dcabtc.com: Shows historical DCA returns
costavg.com: DCA calculator with custom dates
bitcoindollarcostaverage.com: Simple DCA simulator
Example calculation:
Input:
- Start date: January 1, 2018
- Investment: $100/week
- End date: December 8, 2025
Output:
- Total invested: $40,700
- BTC accumulated: 1.8 BTC
- Current value: $171,000
- Return: +320%
Play with different amounts, frequencies, and start dates. The pattern is clear: longer time periods almost always win.
Tax Considerations For DCA
Every DCA purchase creates a separate tax lot with its own cost basis.
Example:
You DCA $100/week for 52 weeks:
- Week 1: Bought 0.0025 BTC at $40,000
- Week 2: Bought 0.00285 BTC at $35,000
- Week 3: Bought 0.00238 BTC at $42,000
- …and so on
When you sell, you need to determine WHICH Bitcoin you’re selling to calculate gain/loss.
Cost Basis Methods
FIFO (First In, First Out):
- You sell the oldest Bitcoin first
- Default method for most exchanges
LIFO (Last In, First Out):
- You sell the newest Bitcoin first
HIFO (Highest In, First Out):
- You sell the highest cost basis first (minimizes taxes)
Specific ID:
- You choose exactly which BTC to sell
For DCA, HIFO usually minimizes taxes since you can sell the BTC you bought at the highest prices first.
Full guide to crypto taxes and strategies here
Managing Tax Complexity
Solution 1: Use crypto tax software
Import all your transactions from exchanges. Software calculates everything automatically.
Cost: $50-200/year. Worth every penny.
Solution 2: HODL longer
If you don’t sell for years, you don’t have tax complexity yet. The problem only exists when you sell.
Solution 3: Sell strategically
Only sell in low-income years to stay in lower capital gains brackets.
If you have a year where you quit your job or take a sabbatical, that’s the year to realize gains.
FAQ: Your DCA Questions Answered
Q: Should I DCA daily, weekly, or monthly?
Weekly is the sweet spot. Daily creates too many transactions. Monthly exposes you to bad timing on that specific day.
Q: What if Bitcoin crashes right after I start?
Perfect. You’ll accumulate more Bitcoin at lower prices. As long as you believe Bitcoin survives long-term, crashes are opportunities.
Q: Should I ever stop DCA’ing?
Only when you’ve hit your accumulation goal or your investment thesis changes (e.g., you no longer believe in Bitcoin).
Never stop because of short-term price action.
Q: Can I DCA into other cryptocurrencies?
You can, but it’s much riskier. Most altcoins don’t survive full market cycles. DCA works best with assets that have long track records – primarily Bitcoin, possibly Ethereum.
Q: What if I started at the worst possible time (the top)?
Backtests show even worst-case-timing DCA becomes profitable within 3-4 years. Keep buying.
Q: Should I increase my DCA amount over time?
If your income increases, sure. But don’t increase it because “Bitcoin is pumping” or decrease it because “Bitcoin is crashing.”
Q: How much Bitcoin do I need to retire?
Impossible to answer. Depends on your lifestyle, location, time horizon. But historically, consistent DCA over 8+ years has created significant wealth.
Q: What’s better: DCA into Bitcoin or index funds?
Bitcoin is far more volatile. S&P 500 has steadier, safer returns. A balanced approach: 70-80% stocks/index funds, 10-20% Bitcoin, 10% cash/bonds.
Don’t go 100% Bitcoin unless you can stomach 80% drawdowns.
Real Stories: DCA Success and Failures
Success Story 1: The Forgetful Investor
Profile: Software engineer, started DCA in 2016
Strategy:
- $50/week automatic purchases
- Forgot password to exchange
- Didn’t check account for 4 years
Result (2020):
- Invested: $10,400
- Accumulated: 3.2 BTC
- Value: $96,000
- Return: +823%
Lesson: Sometimes forgetting is the best strategy. Checking prices daily ruins discipline.
Success Story 2: The Bear Market Buyer
Profile: Teacher, started DCA November 2021 (near the top)
Strategy:
- $200/month DCA
- Never stopped during 2022 crash
- Increased to $300/month during depths
Result (December 2024):
- Invested: $7,800
- Accumulated: 0.26 BTC
- Value: $24,700
- Return: +217%
Lesson: Starting at the top doesn’t matter if you keep buying through the bottom.
Failure Story 1: The Optimizer
Profile: Day trader, started DCA 2019
Strategy:
- Started with $500/month
- Paused during 2020 rally (“too expensive”)
- Resumed during 2021 top
- Stopped during 2022 crash (“going to zero”)
- Resumed 2024 when Bitcoin hit $60K
Result:
- Invested: $15,000 (sporadically)
- Accumulated: ~0.18 BTC
- Could have had: 0.52 BTC if he never paused
Lesson: Trying to “optimize” DCA turns you into a bad market timer.
Failure Story 2: The Shitcoiner
Profile: Crypto enthusiast, 2021
Strategy:
- DCA’d $500/month into 10 different altcoins
- Thought diversification reduced risk
- Avoided “boring” Bitcoin
Result (2024):
- 8 of 10 coins down 95%+
- 2 coins up modestly
- Total portfolio: -73%
If he’d just DCA’d Bitcoin: +215%
Lesson: DCA only works if the asset survives. Most altcoins don’t.
The Bottom Line: Should You DCA Into Bitcoin?
DCA makes sense if:
You believe Bitcoin will be worth more in 5-10 years
You have consistent income to invest
You want to remove emotion from investing
You can commit for at least 4 years
You can psychologically handle seeing your portfolio down 50%
DCA doesn’t make sense if:
You need the money within 2-3 years
You can’t afford to lose the invested amount
You don’t believe in Bitcoin long-term
You won’t be able to resist selling during crashes
You’d be constantly stressed checking prices
My recommendation:
Start with an amount small enough that losing it wouldn’t impact your life. $25-50/week.
Do this for 6 months. If you can stick to it without stressing, increase the amount.
After 2-3 years of consistent DCA, evaluate. If Bitcoin hasn’t worked out, you only lost manageable amounts. If it has, you’re significantly wealthier.
The key is time. The longer you DCA, the better it works.
(Start with the right exchange setup here – I compare fees, features, and security)
Take Action Today
- Step: Decide your amount ($50/week? $200/month?)
- Step: Choose an exchange with recurring buys
- Step: Set up automatic purchases
- Step: Delete the app and forget about it for 6 months
- Step: After 6 months, review and adjust if needed
The hardest part is starting. The second hardest part is not stopping.
But if you can do those two things, history suggests you’ll do very well.
Important Disclaimers
Affiliate Disclosure
This article contains affiliate links to cryptocurrency exchanges. We may earn a commission if you sign up through these links at no additional cost to you. We only recommend exchanges we personally use for DCA.
Read our full disclosure policy
Investment Risk Warning
Bitcoin is extremely volatile and carries substantial risk of loss. Past performance does not guarantee future results.
This article is NOT:
- Financial advice or investment recommendation
- A guarantee that DCA will be profitable
- A suggestion to invest more than you can afford to lose
You should:
- Only invest money you won’t need for 5+ years
- Understand Bitcoin can drop 80%+ during bear markets
- Consult with a licensed financial advisor
- Never invest borrowed money or emergency funds
The author actively DCA’s into Bitcoin and holds significant BTC positions. Historical backtests are based on past data which may not repeat.