Dollar-cost averaging (DCA) in cryptocurrency investing has evolved significantly over time, especially as market understanding deepens. This article marks the first version of my personal DCA strategy—hence the "(One)" in the title. Future updates may follow as market conditions and insights shift, each clearly explained with reasoning behind any changes.
This year, I’ve taken a deeper interest in investment strategies, partly driven by past losses from impulsive trading. Recently, I came across Li Xiaolai’s DCA framework, which sparked real excitement. His methodical approach offers clarity in a volatile space. While I won’t be joining his paid communities—self-discipline makes it unnecessary—his core ideas are worth exploring through publicly available resources.
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Core Principles Behind My DCA Approach
Dollar-cost averaging removes emotion from investing by spreading purchases across regular intervals. In crypto, where prices swing wildly, this discipline is essential. Here’s how I’ve structured my strategy:
- Platform: Binance’s built-in DCA tool (zero fees, reliable execution)
- Frequency: Daily purchases—given rapid price movements, daily buys help smooth entry points
- Duration: Currently allocating funds for a 1-year horizon
- Focus: Long-term accumulation of high-conviction assets with strong fundamentals
The key is consistency and clarity. I avoid chasing trends or reacting to noise. Instead, I focus on asset selection based on supply mechanics, network strength, and real-world utility.
My Current DCA Portfolio Allocation
I don’t blindly follow any single influencer’s portfolio—even one as prominent as Li Xiaolai’s. His early BOX portfolio heavily weighted EOS, which ultimately underperformed. Today, BTC dominates his allocation at 92%, while XIN remains a controversial inclusion given its obscurity to most investors.
My own allocation reflects a balance between proven value and strategic exposure to innovation:
- BTC – 50%
The cornerstone of any serious crypto portfolio. As "digital gold," BTC offers scarcity (21 million cap), decentralization, and the strongest security model (PoW + UTXO). It’s the lowest-risk asset in this space. - ETH – 10%
The leading smart contract platform. Despite no hard supply cap, ETH’s ecosystem dominance, staking adoption, and continuous upgrades (e.g., EIP-4844) justify its place. - LTC – 5%
A long-standing PoW asset with a capped supply. Known as "silver to Bitcoin’s gold," LTC shares mining infrastructure with DOGE, creating shared economic security. - DOGE – 5%
A meme coin with staying power. Backed by cultural momentum and Elon Musk’s endorsements, DOGE benefits from high liquidity and broad recognition—even if fundamentals are weak. - BCH – 5%
A legacy fork of BTC aimed at preserving peer-to-peer electronic cash use. While BTC has shifted toward store-of-value status, BCH represents the original vision—still relevant in debates about blockchain scalability. - ADA – 5%
A research-driven PoS blockchain using UTXO model. ADA stands out for academic rigor and potential to scale securely. If PoS gains broader acceptance, ADA could be pivotal. - SOL – 5%
High-performance smart contract platform. Despite network outages in the past, SOL’s speed and developer activity keep it competitive. - FIL – 5%
Leader in decentralized storage. Built on IPFS and libp2p—technologies widely adopted across Web3—FIL addresses a critical infrastructure need: reliable data storage. - TON – 5%
Emerging smart contract platform backed by a massive messaging user base (Telegram). TON combines scalability with real user adoption potential. - XMR – 5%
Top privacy-focused cryptocurrency. Used extensively on darknet markets alongside BTC, XMR offers superior anonymity through ring signatures and stealth addresses.
All selected assets rank within the top 100 by market cap—a principle drawn from proven investment heuristics emphasizing liquidity and network resilience.
Why These Assets? Key Selection Criteria
Supply Scarcity Matters
Assets with hard supply caps (BTC, LTC, BCH, ADA) align better with long-term value preservation. Unlimited issuance (e.g., DOT, ATOM) increases inflation risk, reducing their appeal for passive holding.
Consensus & Security
Proof-of-Work (PoW) remains the most battle-tested consensus mechanism. My portfolio allocates 70% to PoW assets (BTC, LTC, DOGE, BCH, ADA, XMR), emphasizing security and decentralization. (Note: ADA uses PoS but adopts UTXO model for transaction integrity.)
Real-World Utility
ETH powers DeFi; FIL enables decentralized storage; TON integrates with Telegram—each solves actual problems. Meme coins like DOGE lack utility but offer psychological and speculative value due to community strength.
Avoiding Overhyped or Risky Categories
I exclude:
- Exchange tokens (BNB): Not independent blockchains
- High-inflation PoS chains (DOT, ATOM): Uncapped supply undermines scarcity
- ERC-20 tokens: Often just speculative assets without chain-level significance
- Meme coins beyond DOGE: Most lack staying power
- Bitcoin L2s like Ordinals/Rune: Drive up BTC fees without clear long-term benefit
Frequently Asked Questions
Q: Why not include BNB or other exchange tokens?
A: Exchange tokens are centralized and tied to corporate performance rather than decentralized protocol value. They don’t represent foundational blockchain infrastructure.
Q: Is daily DCA necessary? Isn’t weekly or monthly enough?
A: In highly volatile markets like crypto, daily buys reduce timing risk. Spreading purchases more frequently leads to a smoother average entry price over time.
Q: Why allocate to high-risk assets like XMR or FIL?
A: High risk brings high potential reward. XMR fills a unique niche in privacy; FIL addresses real data storage needs. Both are speculative but rooted in technical merit.
Q: What changed in the September 2024 update?
A: Removed DASH and XEC due to low market relevance and weak community traction. Reallocated their combined 5% to XMR—a stronger privacy coin with broader adoption.
Q: Can smart contract platforms replace Bitcoin?
A: Unlikely. BTC serves as digital gold—scarce and secure. Smart contract platforms serve different purposes: enabling apps and automation. They’re complementary, not competitive.
Q: How do you track your portfolio?
A: I use a public CoinMarketCap Watchlist for transparency and monitoring—all assets are top 100 by market cap.
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The goal isn’t to chase quick wins but to build lasting wealth through consistency, research, and patience. This strategy will evolve—but only with clear rationale and evidence behind each change.
Crypto investing isn’t about perfection; it’s about progress. Stick to the process, stay informed, and let time work in your favor.
👉 Learn how dollar-cost averaging can grow your crypto portfolio over time.