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Warren Buffett praises stocks Dollar-cost averaging — but does it work for Bitcoin?

Published 11/01/2020, 11:00 AM
Updated 11/02/2020, 01:00 PM
Warren Buffett praises stocks Dollar-cost averaging — but does it work for Bitcoin?
BTC/USD
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Warren Buffett has a message to young investors: dollar-cost average into major stock market indices. However, data shows that the same strategy has worked quite well for Bitcoin (BTC) too over the past decade.

The term dollar-cost averaging or DCA refers to a strategy when an investor divides up the total amount to be invested into periodic purchases of the given asset. The theory behind this investment strategy is that when an asset goes up or down, investors can benefit from both reducing the negative impact of price volatility.

DCA performance example. Source: Bitcoindollarcostaverage.com
The daily price chart of Bitcoin in the past year. Source: TradingView.com

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