DCA means putting money in at intervals rather than all at once. It is the most commonly recommended approach in crypto and the most commonly misunderstood.
What it genuinely fixes
One problem: the fear of picking a bad day. Spreading the entry means no single day's price determines the average you paid.
What it does not fix
Averaging into a falling asset makes the loss bigger, not smaller. Each additional purchase lowers your average price and increases the total amount at risk. DCA smooths entry; it does not create a return. In a sustained fall it simply commits more money for longer.
The costs people do not count
- Fees and spread. Every entry pays them. Over many small purchases this is a real number.
- Locked capital. The capital is committed across the period, not available for anything else.
- Plan cycle length. With fixed cycles, a staggered entry means several positions ending at once, rather than one finishing cleanly.
When it suits
When the amount is not time-critical and you have accepted a total you can carry; when you have a standing instruction and would otherwise be tempted to time the market. Timing the market is worth a read, mostly because it shows how badly it usually goes.
When it does not
When the money is needed within the plan cycle, or when the total is more than you would hold as one position. Sizing a position comes first, strategy second.