Historical BTC dollar cost averaging calculator

Based on history, this calculator shows how much you would have earned if you started dollar-cost averaging in BTC in the past. Change the amount, frequency, and time period to find the best strategy.

The pros and cons of the Dollar Cost Averaging strategy

Dollar Cost Averaging is an investment strategy whereby a person invests a set amount of money into an asset at equal time intervals, regardless of the asset’s price, such as after each paycheque. Investors choose this investment strategy when the long-term growth of an asset is obvious, but the investor needs to smooth out short-term price dips. This is a perfect strategy for BTC, according to many analysts.

This strategy is widely known for and works with both traditional and crypto markets. Buying with dollar cost averaging, when a fixed amount of fiat is invested into the asset every week/month/quarter, helps eliminate the human factor, which is heavily influenced by emotions and likely leads to losses. As such, choosing the Dollar Cost Averaging methodology not only provides high average returns in the long term as the purchase price is averaged but also brings calmness and the opportunity to avoid having to spend time monitoring charts.

The advantages of BTC dollar cost averaging

Dollar Cost Averaging is based on the concept of dividing the original investment into many small purchases on a regular basis. This way, you don’t allocate all your capital at one time. This is very important for an asset as volatile as BTC, which can drop 50% within a few weeks, as happened, for example, in April 2021.

As DCA strategies are built on making small but regular purchases, you don’t have to invest a large amount of capital from the first day. This is especially important if you don’t feel comfortable when investing your savings into Bitcoin, so you can instead just set aside a small portion of your income each month.

Everyone who holds BTC for more than four years makes a profit from the initial purchase. However, many people capitulate immediately with losses after the first sharp price drop and no longer want to be associated with the crypto market. In order to avoid making this mistake, it is critical to understand Bitcoin’s value proposition and that it should NOT be considered a “get rich quick scheme.”. The DCA strategy helps with this by giving you time to properly research BTC before the value of your investments becomes meaningful. As a result, your investments will be relatively small while you know not so much about Bitcoin and how it works. However, as your knowledge becomes stronger, periodic purchases begin to work.

By not investing all your capital at once, you are more likely to have resources left for a sudden Bitcoin crash case (which will most likely happen), allowing you to continue accumulating assets at lower prices.

A very underestimated aspect of any investment strategy is the impact it can have on your mental health. This is especially valid for the wild markets of crypto, where price fluctuations that would be considered apocalyptic on the stock market are normal. With Dollar-Cost Averaging, you will never get a shock from investing a large amount of money and then worrying constantly when the price moves. At the same time, the amount of Satoshi you hold will increase gradually.

According to the Golden Savings Standard, a person should save at least 10% of their income to achieve financial freedom. This could be nicely combined with the DCA strategy, which does not require a lot of money at one time and allows people with any level of income to accumulate hard assets.
Cons of the dollar cost averaging strategy for Bitcoin

The DCA strategy doesn’t usually allow you to invest all your capital at the top price; unfortunately, the same happens at the bottom. At the same time, if DCA buying is frequent, like once a day, the bottom price will also be taken but will become one of the many buy prices.

The essence of the DCA strategy – regular small purchases – means that it will take time to achieve the planned amount of assets, which will depend on how you structure your strategy overall.

If Bitcoin is in a strong bull market, the best solution would be to make the entire purchase at once for a good price. That way, the next time you buy, the price will probably be higher. However, on the other hand, how can you be sure that Bitcoin is in a bull cycle? What if the price just demonstrated some strength and it will wipe out all the gains by the end of the month? This is often hard to tell.
How to use the COSTAVER tool

The COSTAVER calculator is a tool that helps you model different scenarios of buying Bitcoin using the DCA strategy based on the historical price of BTC. This allows you to see how your portfolio would have performed under different conditions and determine the best strategies for future BTC investments. Change the data in the settings field and see how this would affect the result in future years.

How is it calculated?

The tool calculates periodic purchases of BTC at fixed amounts from a selected date until today (or how many satoshis you would have acquired based on the historical price of BTC for each purchase). As a result, you’ll see the total amount of DCA accumulated assets and treir actual cost.

What is dollar cost averaging (DCA) for Bitcoin?

Dollar Cost Averaging (DCA) is a strategy that buys a fixed amount of an asset at regular intervals instead of buying the same amount of assets all at once. For example, this could be buying $100 worth of BTC every week for a year instead of $5,200 worth of Bitcoin in one go. This strategy is used by investors who want to acquire assets for the long term but also want to reduce the risk of spending all their stock at a high price.

What is a Satoshi?

Satoshi is the smallest unit of Bitcoin, named after the creator of Bitcoin, Satoshi Nakamoto. It is equivalent to 0.00000001 Bitcoin. Satoshi makes it possible to make smaller and more precise transactions, which also makes Bitcoin accumulation accessible for any amount of USD.

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