Is now a good time to start DCA'ing bitcoin?

Every time someone learns I write these, the first thing they ask is almost always: "Zhou An, can I DCA bitcoin now? Isn't it too high?" I totally understand that agonizing, because back then I was the one tormented most by those two words, "the timing." At the end of 2021 I felt "get in now or it's too late," put in quite a bit in one go, and right after that 2022 cut me in half and I sold at a loss at the lows. At its root, my mistake then was taking timing far too seriously.

So in this piece I want to answer you from a different angle: rather than agonize over "is now suitable," first get clear on what DCA is actually for. Once you've thought that layer through, the "now" question loosens on its own.

"Is now a good time" is the wrong question

The reason you'd agonize over whether now counts as a good time hides an assumption: you think you can judge whether the price is high or low. But if you really could judge that, you wouldn't need DCA at all — you'd just buy low and sell high directly.

Conversely, the reason you'd consider DCA is precisely that you've (very honestly) admitted one thing: I can't read it. So if you've admitted you can't read it, then going back to ask "is now a top" is self-contradictory, isn't it? It's the same judgment — you can't, on one hand, say "I can't judge," and on the other rely on judgment to decide whether to start.

This isn't a tongue-twister. What I'm saying is: agonizing over timing means you haven't truly accepted DCA's premise in your heart. Once you accept "I simply can't read it," most of that agonizing disappears.

DCA was built precisely to sidestep timing

The entire design of DCA is to cancel outright the thing ordinary people can't do well — "timing." Its logic is: since no one can buy at lows steadily, I'll just not guess, buy a fixed amount at fixed times continuously, and let time average my cost to a middling spot.

When the price is high I buy less, when it's low I buy more, and over the long term the average cost isn't locked dead at any single point. The premise for this mechanism to work was never "picking the right day to start," but "I bought continuously for a long enough time." In other words, DCA bets on time, not on the moment.

So "is now suitable" really isn't a key question for DCA. The key questions are three other prerequisites — without these met, the prettiest timing is wasted; with them met, when you start actually makes little difference.

Prerequisite one: invest only money you can afford to lose

This is the hardest of all the prerequisites. DCA helps you average your cost, but it can't block bitcoin itself from a big drop. After bitcoin's high of around $69,000 in November 2021, it at one point dropped to about $15,500 by November 2022, a fall of roughly 77% (data from public market records). That is, during your DCA you could entirely be deeply underwater for a long time.

If what you put in is the rent, the credit-card bill, or money needed next quarter, that underwater state will force you to stop or even sell at the most painful moment — which is precisely when DCA should least be interrupted. So before you start, confirm this first: if this money went to zero tomorrow, my life wouldn't be affected. How to work out the cap, I wrote in How much should you put into crypto.

Prerequisite two: think through how long you'll invest

DCA is a game of being friends with time. Invest for three months and then check the result, and you're basically betting on short-term moves, with DCA's advantage never getting a chance to unfold. You should at least get clear: is this a plan I intend to stick with for years, across bull and bear, or just a short-term dip of the toe?

These two mindsets decide whether you can keep buying when it falls. If "short-term" is your default in your heart, you'll waver the moment a bear hits; if from the start you set the cycle as "I intend to invest for many years, and however deep it drops in between I'll keep investing," then whether now is high or low really is just one point on this long road. Thinking through the cycle matters far more than picking the timing.

Prerequisite three: don't dress up a bull-market all-in as DCA

This is a trap I especially want to flag. When the market is hottest and the price is surging most fiercely, a lot of people can't hold back, dump a large sum in "across two or three buys" quickly, and then tell themselves "I'm DCA'ing."

You're not. Dumping a large amount in concentrated over a very short stretch, at a high when emotion is most flared, is a disguised all-in — it just wears a DCA shell. Real DCA is small, long-term, and steady in rhythm; its spirit is not getting carried away, and a bull-market-top impulse is exactly the most carried-away moment. If you find yourself wanting to "speed up the DCA rhythm" or "invest more this time," pause — that's usually emotion using DCA's name to make you go heavy. I discussed people's state in that kind of atmosphere in In a bull run, which signals should make you start trimming.

If you're just afraid it's too high now

The reasoning's done, and I get that emotionally you'll still be scared. So here's a practical compromise, without gambling on a lower entry point:

• Set each period's amount smaller. The more afraid you are it's high now, the more it argues for a smaller single batch and a longer cycle to average, rather than investing it all in one satisfying go.
• Use your planned total, stretched over a longer period. The same money you'd planned to finish in 3 months, change to 12 months, and the pain of happening to buy at a high gets much smaller.
• Don't "wait for a drop to start." Waiting for a drop is back to timing, and you most likely can't judge how far a drop is enough; the result is often watching it climb up the whole way while never getting on board.

Recap: swap the timing question for the prerequisite question

To wrap up: the question "is now a good time to start DCA'ing" should be swapped for "have my three prerequisites been met?" Invest only money you can afford to lose, think through the cycle, and don't dress up a bull-market all-in as DCA — with these three met, no time to start is wrong; with these three unmet, no perfect timing can save you.

DCA's biggest upside is that it lets you no longer be the one judging the moment. Use that "no need to judge" well and you've already dodged the biggest pit I stepped in back then. As for what exactly this money should buy, that's the next piece's topic.