Let’s crunch the numbers

Dollar-cost averaging (DCA) is an investment strategy which can lead to better results than attempting to time the market. Instead of investing 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 investment costs and increase your returns.

Dollar-cost averaging works by investing the same amount of money into an asset on a regular basis, regardless of the asset’s price. For example, you could invest $100 in 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.

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

In the long term, dollar-cost averaging can:

1. Reduce market risk
2. Lower investment costs
3. 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.