Dollar-Cost Averaging (DCA)

DCA is a simple strategy: invest the same amount regularly, regardless of price. Over time, this reduces the impact of volatility.

How DCA Works

Example: Invest R1,000 every month into Bitcoin.

  • Month 1: BTC at R200k → You buy 0.005 BTC
  • Month 2: BTC at R180k → You buy 0.0056 BTC (more at lower price)
  • Month 3: BTC at R220k → You buy 0.0045 BTC (less at higher price)

In this example the regular purchases give a slightly lower average cost before fees. In a rising market, buying earlier can give a lower cost instead.

Advantages

  • Removes emotion from investing
  • Reduces timing risk (no need to predict the bottom)
  • Builds discipline
  • Works in both bull and bear markets

Disadvantages

  • In a strong bull market, lump-sum investing beats DCA
  • Small investments may have high fees
  • Requires consistency (easy to skip months)

Tax in South Africa

Keep the acquisition costs and fees for each purchase. On disposal, substantiate the applicable base cost and determine capital or revenue treatment from the facts; weighted average is not a universal crypto rule.