What Is The Best Way To Buy Bitcoin? | Dollar Cost Averaging

best way to buy bitcoin

What Is The Best Way To Buy Bitcoin?

The best way to buy Bitcoin is by Dollar-Cost Averaging, aka DCA. There’s no doubt you’ve been hearing this term thrown around since the day you stepped foot into the Blockchain space. There’s a really good reason for that.

Dollar-Cost Averaging is quite possibly one of the most useful investment tools at your disposal. It requires minimum effort to execute properly and removes a lot of the nuances with investing in almost anything. Chances are high that you’ve Dollar-Cost Averaged into something at some point in your life already, perhaps without even knowing it. This is because Dollar-Cost Averaging is simply acquiring a fraction of something over what’s usually a long investment timeframe, purchasing a fraction of Gold, Stocks, or Cryptocurrencies.

What is Dollar-Cost Averaging?

Most Americans experience this through their introduction to a Company Retirement Savings benefit known as a 401K or IRA. This benefit is part of employment at most reputably traded companies in the USA. Employees have the option to deposit a portion of their paychecks into these 401ks and IRAs. In return, their employer will match a portion of this deposit. This allows good faith for both employee and employer as it shows they want to “invest” in one another. Generally, these retirement plans are spread out over long periods of time. Employees are Dollar-Cost Averaging their money by investing a portion of their income on a regular schedule over decades.

DCA into Bitcoin

In the same way that employees deposit a portion of their income into these retirement accounts, while there’s no company to match this investment, you can use this same tool in order to Dollar-Cost Average into your favorite digital asset.

Instead of seeing a sudden rise in price and deciding it’s time to spend your savings chasing the sick gains wave. A better idea would be to take the total amount you’re willing to risk and spread it out over a year or two. Make a plan for how much you can afford to acquire every week, just like someone investing in a retirement savings account, then simply buy the affordable amount every week or month according to whatever your retirement time frame is.

Why Should You Dollar-Cost Average into Bitcoin?

A rational adult wouldn’t go to a casino and bet their house on a single spin at the roulette wheel. Blockchain technology should be treated in the exact same way. Cryptocurrency is not a casino meant for you to spin some random Altcoin wheel and hope to outplay the house. That’s the fast track to getting REKT real quick. Instead, use Dollar-Cost averaging as it was intended. By doing this you will effectively outplay the majority of the market and traders leveraging large amounts of risk for short-term gain. By purchasing small amounts of an asset like Bitcoin $BTC over long time frames. You are buying while the price is fluctuating between highs and lows. Allowing you to lower your risk of volatility by not gluing yourself to a single price target. Historically this has been the absolute best way to acquire Bitcoin. 

A more important part of Dollar-Cost Averaging, just like investing in a retirement savings account, is the ability to remove emotion from your investment. Emotions are where uncertainty, doubt, and fear of missing out hide causing good people to make terrible investment decisions. An employee for Coca-Cola doesn’t look at the price of its Stock every day or week. Instead, the process is automated and the employee only looks at this account yearly. This same process can be applied with Bitcoin $BTC.

Applications like Strike allow anyone to set weekly or even hourly recurring Bitcoin purchases. Allowing users to set up how much Bitcoin $BTC they would like to buy and how often. With a $0.50 minimum purchase, anyone can buy a little Bitcoin every week and start stacking Satoshis. This makes the Dollar-Cost Average process inexpensive and easier than ever for you to use.

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By Lark Davis

Combining cutting edge insider insights and done-for-you market analysis to deliver crypto investors the best opportunities to grow their wealth, stay ahead of the curve, and avoid costly mistakes! We cover DeFi, NFTs, Altcoins, Technical Analysis and more!