Dollar Cost Averaging (DCA) with CoinJar Bundles Recurring Buys have landed at CoinJar in Australia and will be available in the UK soon, allowing you to set up weekly, fortnightly, or monthly debits at a rate of your choosing. Set up direct debit transfers from within your CoinJar iOS or Android app, with additional payment methods on the way.
What is Dollar Cost Averaging (DCA)?
DCA is a commonly used investment strategy that allows you to automatically send money from your linked bank accounts in regular intervals (additional payment methods coming in the future) and purchase CoinJar Bundles to ensure your portfolio is diversified.
Purchasing $10 every week, for example, would be dollar cost averaging. Below shows two examples of investment outcomes with and without dollar cost averaging.
Investing in Bitcoin with no DCA (Example)
Paul decides to purchase $2,500 worth of Bitcoin on December 29th, 2017.
The Bitcoin price at the time was $16,461 per coin, which means that Paul now owns 0.152 BTC.
Investing in Bitcoin using DCA (Example)
Julia decides she wants to purchase $2,500 worth of Bitcoin on December 29th, 2017.
However, instead of investing the entire amount today, she decides to purchase $250 every month, for 10 months.
10 months later, Julia owns 0.2365 BTC. Thats almost twice as much as Paul, even though both invested the same amount.
Benefits of DCA
- Reduces the risk of buying at market tops
- Doesnt require big up-front investment
- Set and forget - you wont have to login each month to purchase cryptocurrency
How to set up CoinJar Bundles with Recurring Buys
- After opening the CoinJar iOS or Android app, tap Bundles at the bottom of the screen.
- Select a Bundle
- Select Add funds to bundle
- Select Recurring buy
- Choose your Payment method
- Create your Payment Schedule (amount, starting date, and frequency)
CoinJar utilises reserved balances to minimise the risk of fraudulent direct debit transfers, and these can influence the t ...
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