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Is Value Averaging (VA) Better Than Dollar Cost Averaging (DCA) by readthisplease

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· @readthisplease ·
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Is Value Averaging (VA) Better Than Dollar Cost Averaging (DCA)


We usually talk about Dollar Cost Averaging a lot because it seems like the remedy to accumulate coins regardless of the noise. The digital asset investment market is a psychological place where everyone wants to make more profit with less capital, everyone wants to sell high and buy low, because we like getting all the profits. The moment your money starts getting involved in anything, your interest and feelings towards that particular thing high-tens, this is why most people prefer the Dollar Cost Averaging technique. It gives you peace of mind, you just buy and don’t care about the price, all you care about is the number of token or coin you are accumulating till the price pumps enough to let you gain the financial freedom you are seeking. But just as lots of people love DCA, some people are comfortable with other techniques as DCA can not be a one size fit all technique. This is where the Value Averaging comes in. 

![image.png](https://images.hive.blog/DQmXBmSaNzTMchY87f1uJSYaoDV5HMyjFdstcbb8nju4ozJ/image.png)
[source](https://unsplash.com/photos/iQqqo2zpmTI)
Value averaging in my own opinion is riskier than DCA but if you are able to time it right you can make a lot of money off it. So value averaging is buying more when the price is low, then buying less when the price is high. Sometimes people sell their holdings when the price is high, then wait for the price to get low again so they can buy. But this is where it gets a little risky, no one can predict the market, if you sold when you think the price is high and wait when it gets low, what if it never gets low again. For instance, buying when the price of bitcoin got to $80 was low right? Then the price got to $100, seems like a perfect time to sel right because the price had gotten higher. Imagine selling when the price was $100 while waiting for the price to get down to $80 again, unfortunately it kept going higher and never came back. 

But you never can tell, because in 2021, the price of bitcoin got to $69k, if you sold at the peak then waited for the bear market, if you had waited to buy back bitcoin when the price got down to $25k you should have 2 BTC today. But it’s not as easy as it sounds, that is why it is more risky than DCA. If you are lucky or fortunate enough you can turn 1 BTC to 2 or More BTC depending on how the value dips. 

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vote details (93)
@chefdjg ·
I use both methods when accumulating different tokens. It just depends on my portfolio as a whole. I am constantly rebalancing my DCA and VA as the prices always fluctuate. I like the hybrid method of using both. Great article, keep it up.
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