Bitcoin Savings Plan Beats Lump Sum Purchase in One-Year Test
The cost average effect, also known as dollar cost averaging (DCA), is a strategy that involves buying a fixed amount of an asset at regular intervals, regardless of its price. This approach can help investors avoid timing the market and reduce their exposure to potential losses. A recent analysis by CryptoTicker found that using a savings plan to buy Bitcoin resulted in an average price 3.67% lower than the average market price over a one-year period.
The calculation, which was based on 366 daily closing prices for Bitcoin from September 20, 2025 to September 19, 2026, showed that twelve monthly instalments of 100 euros each resulted in an average price of 66,472.48 euros. This is 2,532.96 euros lower than the arithmetic mean of the purchase prices, which was 69,005.44 euros.
The cost average effect is a purely arithmetical consequence of fixed instalments and does not protect against losses. If the price falls lastingly, the value of your portfolio will fall too, only more slowly than with a lump sum purchase at the starting price.
A key finding of the analysis was that in a year where Bitcoin's price fell by 34.1%, the savings plan portfolio outperformed a lump sum purchase on the same starting day by 33.6 percentage points. However, if the investor had bought at the peak price, they would have lost 34.1% of their investment.
The analysis also highlighted the importance of considering fees and spreads when evaluating the cost average effect. Percentage fees may not be significant, but fixed minimum fees per order can eat into the cost advantage.