Example illustrating the dollar cost averaging strategy
Here is an example to help you understand this strategy. Suppose we have a fixed investment amount of 10,000 USD, and we see this as a favorable opportunity to invest in Bitcoin. We also see that the price will often fall within the current range, and that there is a good opportunity to build a deal cumulatively by using the dollar cost averaging strategy.
We will divide the amount ($10,000) into 100 payments, each worth $100. Every day, we buy $100 worth of Bitcoin, whatever the price. Thus, we will distribute the total amount to be invested over approximately three months.
