The DCA (dollar-cost averaging) calculator is a tool for calculating gains of investor's recurring investments. It is not a general calculator, meaning it will not serve you results for stocks or crypto in general, but for Bitcoin.
The Bitcoin dollar-cost averaging calculator is made specifically for BTC investments using the DCA investment strategy. This means that its algorithm can estimate an approximate final FIAT investment value after a selected period while investing in Bitcoin every month.
The Dollar cost averaging calculator serves to state an approximate monthly investment amount in FIAT currency like EUR or CZK to reach your specific financial goal using the DCA strategy for Bitcoin.
The other option is to calculate an approximate statistical final amount in a preferred number of years while investing a selected monthly amount in BTC for a selected amount of years.
Both of the ways are using the statistical data from the last Bitcoin cycles. The algorithm is considering the halvings meaning it is expecting the BTC price to rise in a linearly decreasing trend in future cycles.
Bitcoin is a volatile investment asset, but the DCA investment strategy reduces this volatility impact by averaging the purchase price.
The investment strategy itself is very simple. It does not require anything more than just setting a fixed amount of your investment + a period. Then just keep it going.
Discipline and consistency are usually the investor's greatest enemy. With this strategy is way easier to beat these bad habits.
Incorrect investors' behavior of market timing often comes from FOMO (fear of missing out) and FUD (Fear, uncertainty, and doubt), the DCA investment method lowers their risks.
Nobody knows the upcoming lows and highs of any market, therefore it is important to get at least an average of the wanted purchase price.
The complex and truly working investment strategies are usually costly or even inaccessible for a wide range of investors. The DCA strategy is available and accessible to everyone.
Regarding performance, DCA is not the best-performing strategy.
It is important to select the right broker to avoid unnecessary fees or transaction costs. Most of the exchanges have percentual fees so this is usually not an issue.
Once you select the DCA strategy, it is important to also accept its way of working. It might be difficult to see the price moving up or down and accept not buying more or stop buying.
The strategy itself does not include any stop losses or hedges. It is just a simple way to get exposed at the right price levels.
The DCA usually consists of many standalone purchases so without a proper tool it might be hard to track what is the exact purchase price, etc.
The method's simplicity does not provide any alternatives. Nevertheless, nobody says you cannot use the DCA next to another strategy, e.g. 50:50.
The dollar cost strategy is not ALWAYS the TOP investment strategy, nevertheless, DCA is usually the best long term investing method, especially for beginners and busy investors who do not have time to analyze the market too often and to change their strategies.
It is also great to use the strategy in situations where we want to accumulate a huge amount of Bitcoin in a certain period, not at once. Especially in times of bear market when the BTC prices are lower than its ATH (all-time high). With the right timing can help our BTC DCA calculator.
The DCA strategy might be better not to use in times of bull market peaks, meaning during the new ATH prices and the retail FOMO. We recommend estimating the right timing e.g. using the NUPL (net unrealized profit/loss) indicator while it is in the area of euphoria.