Bitcoin has done it again: From an all-time high of around $120,000, it has dropped to about $60,000 within a few months – a decrease of around 50%. Those who invested at the peak are now sta
Bitcoin has done it again: From an all-time high of around $120,000, it has dropped to about $60,000 within a few months – a decrease of around 50%. Those who invested at the peak are now staring at a halved portfolio. However, those who invested with a clear plan and the right investment strategy are already familiar with this scenario from previous cycles and know: Right now is when the foundation for future returns is being laid.
In early 2025, Bitcoin reached a new all-time high of around $126,000 – approximately $120,000. What followed is familiar to experienced customers of the crypto market: profit-taking, panic selling, and a price drop of around 50%. The price fell to values between $60,000 and $70,000.
Such crashes are not anomalies. In previous cycles – such as 2017/18 or 2021/22 – losses ranged from 40% to over 80%. Nevertheless, Bitcoin recovered each time and reached new highs.
The problem: Many beginners enter at the top, driven by FOMO and media hype, and sell in panic at the first major decline. DCA – dollar cost averaging – is the method that cushions this behavior. Instead of waiting for the supposedly perfect moment, you invest a fixed amount regularly in cryptos like $Bitcoin or $Ethereum.
In this article, we will show you how DCA works in crypto, how to strategically use crash phases, and how to invest step by step with a crypto savings plan – for example, through Bitpanda.
Dollar-Cost-Averaging (DCA) means that you regularly buy a fixed amount of an asset – for example, €100 in Bitcoin every month. DCA allows for regular investments in cryptocurrencies without having to worry about the current price.
The cost averaging effect works like this:
This method comes from traditional investing: ETF savings plans, mutual funds, and retirement plans operate on the same principle. DCA is simple for beginners and does not require extensive knowledge of cryptocurrency markets. It does not guarantee profits, but it limits psychological errors such as panic selling and impulsive trading.
The crypto market is notorious for its volatility. Daily movements of ±10% are not uncommon, and cycles where prices like Bitcoin drop from $120,000 to $60,000 are part of everyday life. DCA is particularly advantageous in volatile markets like cryptocurrencies because it allows you to take advantage of these fluctuations.
Market timing is extremely difficult in these markets. Even professional traders and analysts regularly miss the mark when it comes to identifying tops or bottoms. DCA reduces the risk of investing just before a market downturn because you spread your capital over many points in time.
DCA aims to reduce the effects of market volatility. Instead of letting market fluctuations control you, you automatically buy in bull and bear markets. This way, you benefit on average from the long-term trend of the asset.
Pension funds and retirement savings plans set the example: They regularly invest large sums in broadly diversified assets over decades without trying to perfectly time short-term fluctuations. DCA works particularly well for long-term crypto investors with a time horizon of 5 to 10+ years who believe in the fundamental value of Bitcoin and Ethereum.
Bitcoin halves from $120,000 to $60,000. Many altcoins fall 70–90%. The monetary value in the portfolio shrinks. Emotions run high. Right now, the plan separates from the panic. Here are three options you have as an investor in such phases:
Option 1 – Continue Investing via DCA: Many long-term investors simply let their existing crypto savings plan continue. DCA allows for the purchase of more units at low prices – and that is the core of the strategy. Those who consistently invest during the crash significantly lower their average entry price. An example of DCA is a monthly investment of €100 – regardless of whether Bitcoin is at $120,000 or $60,000.
Option 2 – Partially Shift to Stablecoins: Some investors park a portion of their position in stablecoins (e.g., USDT, USDC, EURS). This secures liquidity and allows for larger special purchases when signs of recovery or further downward exaggerations appear.
Option 3 – Pause the Savings Plan and Monitor the Market: Some investors temporarily stop their DCA and analyze the situation: macro data like interest policy, on-chain data like hash rate or wallet activity, regulatory developments. Only when there are signals like rising trading volumes or breaking through important resistance levels do they become active again.
None of these options are “always right.” The right choice depends on your risk tolerance, liquidity, and time horizon. What matters is a pre-defined plan rather than spontaneous panic decisions.
Imagine you invest €200 a month in Bitcoin over 24 months. Month 1 starts at the all-time high of $120,000. In the following months, the price falls to $60,000, partially recovers, and continues to fluctuate. DCA can lower the average purchase price of an asset – your averaged entry price will end up significantly below the top, perhaps at $80,000–90,000.
Here’s how to implement DCA correctly:
Typical mistakes to avoid:
DCA is particularly suitable for established crypto assets. High-risk altcoins are often more cyclical and less predictable – DCA does not protect against permanent losses in those cases.
Bitpanda is a user-friendly platform that is particularly suitable for starting with DCA. DCA is suitable for beginners and long-term investors – and Bitpanda makes the process as easy as possible. Bitpanda is the only regulated crypto exchange under BaFin, which offers a high level of security.
Step 1 – Registration via Our Link: Click here, open a free account, and confirm your email address. The registration takes only a few minutes.
Step 2 – Identity Verification (KYC):Crypto exchanges must verify users with an ID. As a regulated provider, Bitpanda requires verification via ID or passport, possibly also via video identification – comparable to opening an account at a bank.
Step 3 – Deposit Euro Balance: Transfer euros to your Bitpanda account via SEPA or other payment methods. A SEPA deposit typically takes 1–2 banking days. Other deposits like credit cards are also possible depending on the region.
Step 4 – Set Up Crypto Savings Plan (Auto-Invest): In the app or on the website, you can create a savings plan for Bitcoin or other crypto assets. Choose your amount (e.g., €50 monthly), the interval, and the payment source. Many crypto exchanges offer automated savings plans for DCA – Bitpanda's Auto-Invest function is among the most convenient.
Step 5 – Regularly Check Your Portfolio, But Don’t Trade Daily: Review your plan at intervals of 3–6 months. Adjust the strategy as needed, but avoid frantic reactions to every price fluctuation. DCA requires long-term discipline and consistent purchases.
Our savings plan comparison provides additional information on how Bitpanda compares to other providers.
A comparison of crypto savings plans is crucial because the differences in fees, coin selection, minimum amounts, and regulatory status are significant. Transaction costs can diminish returns with frequent purchases – that’s why it’s worth taking a close look at the fee structure.
Here’s an overview of the fees of important providers:
ProviderTrading FeesSpecial FeaturesBitvavo0.25%2-Factor Authentication, lowest spreadKraken Pro0.25–0.4%Founded in 2011, high security standardsBSDEX (Stuttgart Exchange)0.35%Regulated in GermanyBitcoin.de1.0%Marketplace modelBison (Bison App)1.25%Multi-layer security concept, ISO certifiedCoinbaseup to 2.5%High fees, especially for altcoinsBitpandavariableOnly regulated crypto platform under BaFinSMS-TAN procedures are considered less secure than app-based 2FA – ensure that your provider offers modern authentication. Bitvavo uses 2-Factor Authentication for added security. Kraken was founded in 2011 and has high security standards. Bison has a multi-layer security concept and is ISO certified.
A good DCA provider should meet the following criteria:
Our crypto savings plan and exchange comparison presents these points clearly. Bitpanda offers a particularly straightforward way to get started: a wide selection of crypto assets, a convenient savings plan function, staking options, and the Bitpanda Card. Getting started through our referral link takes just a few minutes.
Still, keep in mind: The choice should always fit your own needs – risk profile, desired coins, additional features like rewards or payouts. The Trade Republic card or other financial products can also be sensibly used depending on your goals. Investors in the Netherlands may have different provider options than users in Germany.
Successful investing has less to do with “secret knowledge” than with discipline, patience, and a clear system. Large companies, pension funds, and retirement funds regularly invest large sums into broadly diversified portfolios over the years – monthly or quarterly. They do not try to time short-term fluctuations.
Individual investors can approach a Bitcoin or crypto savings plan similarly on a smaller scale: regular amounts, long investment horizon, clear strategy, no frantic trading or selling.
DCA promotes disciplined investing without emotional decisions. Emotional control is achieved through the automation of DCA – you don’t have to check the price every day and ponder over buying or selling. DCA minimizes emotional decisions while investing and reduces the impact of market volatility on your well-being.
In crash phases – such as the drop from $120,000 to $60,000 – the DCA investor knows: They are buying at a lower price now. The focus is on the long-term trend, not the daily price. This psychological influence is enormous and makes the difference between panic selling and calmly moving forward.
Long-term thinking also means viewing crypto only as part of the overall portfolio. Timeframes of 5 to 10+ years are realistic – just like with traditional investments in funds or stocks.
DCA is a helpful toolset, but it is not a miracle solution. Crypto remains a risky asset class with the potential for total losses in individual projects. A realistic understanding of the limits is essential.
DCA reduces the effects of market volatility—but it does not eliminate risk. Only invest money that you can afford to set aside for the long term.
The principle of DCA is timeless because it does not depend on whether Bitcoin is currently at $20,000, $60,000, or $120,000. It’s about investing in installments over a longer period. Especially after significant pullbacks—like the drop from $120,000 to $60,000—DCA can be attractive for newcomers because the entry prices are significantly lower compared to the all-time high. DCA reduces the risk of investing just before a market downturn and provides a solid experience even for investors without deep market knowledge.
That depends on your situation. Many long-term investors consciously keep their savings plan running to benefit from lower prices. Others pause for risk reasons—such as job insecurity or liquidity needs. The necessity of a predefined strategy is crucial here: Set conditions before the crash under which you will continue or pause (e.g., “I will maintain the savings plan until a price drop of X%”). This way, you avoid spontaneous panic decisions.
DCA is typically used for established, liquid cryptocurrencies—primarily Bitcoin and Ethereum, as they have the longest history and the highest market capitalization. Highly speculative altcoins with low volume can still pose a high risk for permanent losses or project failures, even with DCA. The advantages of DCA are most pronounced with assets in which you believe in the fundamental value over the long term.
Some investors park a portion of their regular deposits in stablecoins to make larger special purchases during significant downturns—such as an additional 20–30% price drop. This hybrid strategy is a sensible addition but makes implementation more complex. You should clearly define when and how the stablecoins will be converted back into crypto to avoid decision paralysis. A clear set of rules will help you with this.
The amount must always fit your individual situation. Crypto investments should not be funded with money that is needed in the short term for rent, emergencies, or debt repayment. Start with small amounts—e.g., $25–100 per month—and only increase after gaining experience and comfort over several months. Through Bitpanda, you can already set up a savings plan with low amounts and gradually build your portfolio.
