Dollar Cost Averaging. The answer to the question “Is now a good time to buy Bitcoin?”
[Updated: 10 Dec, 2021]
Because nobody knows the future price there is nobody who can, with confidence, provide an honest answer to that question.
In the short term, Bitcoin goes up. Bitcoin goes down. It can be a very volatile investment. In the longer term (e.g., any five year period), bitcoin has only gone up in price. If a person’s investment time frame is five years or more, then perhaps the answer to the above question is: Yes, of course now is a good time to buy bitcoin.
But the person asking that question probably isn’t really asking if now is truly a good time to buy bitcoin. They are instead likely making one of two statements, either:
- “I don’t really have confidence in bitcoin. So if I were to buy bitcoin now, I don’t want my investment to go down in value later.“
- “I want to buy low, but the price today isn’t low. But if I wait for a better price, it might go up even higher and I will miss out.“
Dollar Cost Averaging
What a hesitant investor could do is follow Dollar Cost Averaging (DCA). That’s where they spread their buys over a certain period of time. e..g, 6 months. They then buy $50 each month, to reach an investment target of $300 (for an example).
If the Bitcoin exchange rate goes down from today’s price, great, their average price for their position will be less than today’s price per BTC. If the exchange rate goes up from here, great, they got at least some at today’s price, which they wouldn’t have gotten had they sat on the $300 for six months waiting for a lower price to occur.
There’s still the risk of the price going down after their purchase, but this strategy is one that works for many who struggle with FOMO and/or regret, or those who stress over trying to time the market.
Each time you buy bitcoin and withdraw your bitcoin you will incur fees. The list below are some exchanges that make DCA purchases less burdensome. The DCA feature on an exchange might be labeled as “recurring purchases” or “automated buying”. There might be a selection of fixed periods (e.g., Monthly, Weekly, Daily).
- Swan Bitcoin (US) ← Bitcoin Only, [Free withdrawal, when BTC amount reaches threshold]
- GiveBitcoin (US) ← Bitcoin Only
- River (US) ← Bitcoin Only, [On Lightning network ⚡, BTC withdrawal is free or miniscule]
- Strike (US) [⚡] ← Bitcoin Only
- Cash App (US) ← Bitcoin Only, Be aware of the daily and weekly withdrawal limits
- Gemini (50+ Countries)
- Voyager (US only, for now)
- Binance.us (US)
- Casa (US) ← Announcement
- Relai (EU, and CH) [NO-KYC] ← Bitcoin Only
- StackinSat (EU) ← Bitcoin Only
- xSats (EU, UK) [⚡ “soon”]← Bitcoin Only
- Coincorner (UK) [⚡]
- Pocket Bitcoin (EU, UK, CH) ← Bitcoin Only
- Mt. Pelerin (UK, EU, CH)
- BitPanda (UK, EU, CH) ← Announcement
- Bittr (EU-SEPA) ← Bitcoin Only
- Bottlepay (UK, EU) [⚡] ← Bitcoin Only, Announcement
- Luno (UK, EU-SEPA, AU, SG, ID, MY, ZA, NG, UG, ZM)
- BitcoinVoucherBot (EU-Sepa) [NO-KYC], thru Azte.co [⚡] ← Bitcoin Only, Announcement
- FastBitcoins [⚡] ← Bitcoin Only, Announcement
- Bull Bitcoin [⚡] (CA) ← Bitcoin Only, Announcement
- Amber (AU) ← Bitcoin Only
- Independent Reserve (AU & NZ)
- BTC Markets (AU-BPay)
- Bitaroo (AU) [⚡] ← Bitcoin Only
- BitNob (NG) [⚡] ← Bitcoin Only
- Bipa (BR) [⚡] ← Bitcoin Only
- Bitdroplet (IN, EU, UK, US), funding methods INR or USDT.
- BitKipi (EU, CH) [coming soon] ← Bitcoin Only
Bots / Automation Tools
- Autocoin ← DIY DCA on BitSTAMP
- CoinDCA ← DCA on your Coinbase Pro account using this web-based agent
- GDax Bot ←DIY DCA on Coinbase Pro using this web-based agent
- DeltaBadger ← DCA on your Kraken, Bitbay or Binance account using this web-based agent
Automation using Banking Network
- Using PayDay by Strike ← Your employer sends your pay (e.g., Direct Deposit) to your “bank account” with Strike
- Using BitWage ← Employer signs up with BitWage, or gig worker/employee signs up with BitWage and then employer sends your pay (e.g., Direct Deposit) to your “bank account” with BitWage
- Dollar Cost Averaging article on Wikipedia
- DCABTC Investment Calculator
- CostAvg Investment Calculator
- Bitcoin Dollar Cost Average Investment Calculator
- DCA Tracker Directory / Blog
Caution and Disclaimer
Each exchange service operates under their own policies and procedures. Do your own research on the fees and on when your bitcoins are available for withdrawal. There are a few exchanges with automated buying / recurring purchases which I omitted from the lists above because I recommend that you not use them, and these “not recommended” exchanges include Coinbase (online store), and Crypto.com.
Additions, corrections, and other feedback welcome and can be submitted via e-mail.