How much could your crypto be worth if you had regularly bought a small amount over time? Find out with our crypto dollar-cost averaging calculator.
Choose an asset, recurring deposit amount, how often you purchase, and start/end dates, and discover what your crypto holdings would have been using a DCA approach.
Let’s crunch the numbers
Learn more about DCA
What is Dollar-Cost Averaging?
Dollar-cost averaging (DCA) is a purchasing strategy which can lead to better results than attempting to time the market. Instead of buying all your funds in one go, the idea is that you break it up into a series of smaller purchases which you make at regular intervals. The goal is to reduce your exposure to market volatility and help lower your purchase costs and increase your returns.
How does Dollar-Cost Averaging work?
Dollar-cost averaging works by buying the same amount of money into an asset on a regular basis, regardless of the asset’s price. For example, you could purchase $100 worth of Bitcoin once a month, irrespective of market volatility.
The asset price will often go up and down, so you may get fewer tokens for your money on some occasions. However, over time this will even out and the average cost per token will often work out more favorably than if you were to try to time your trades.
How do you calculate the average dollar cost?
To calculate the dollar-cost average of your portfolio, divide the sum of total cost by the number of total assets.
Here’s the dollar-cost averaging formula: Total cost divided by total number of tokens = dollar cost average
What are the benefits of Dollar-Cost Averaging?
In the long term, dollar-cost averaging can:
- Reduce market risk
- Lower purchase costs
- Save time otherwise spent tracking asset prices
It’s a great way to start trading if you’re new to crypto - and we’ve made it even easier for you on Uphold. Set up a regular deposit into an asset today with our automated transaction tool: get all the benefits, and none of the hassle.
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