The Dollar-Cost-Averaging bots are automated trading bots to help traders build positions incrementally. Bybit’s Dollar-Cost Averaging bots allow you to automatically buy coins based on a preset investment amount and time intervals within a specific period, thereby reducing the influence of market volatility.
The Dollar-Cost Averaging bots are based on the Dollar-Cost-Averaging strategy, which is an investment strategy that helps you average the price of your coins by investing in a certain number of them on a regular basis.
Since you’ll be investing at regular intervals, Dollar-Cost Averaging bots are suitable for most investors. Especially if you are a:
- Long-term holder of coins
- Long-term investor, and you don't care much about short-term coin price fluctuations
- An investor who can’t keep an eye on the market all the time
How does the Bybit Dollar-Cost Averaging bot work?
Bybit allows you to create a Dollar-Cost Averaging bot with one coin or a portfolio of up to five coins. Let's see how the Dollar-Cost Averaging bot works by using an example.
Before learning more about Dollar-Cost Averaging trading, let's briefly understand some parameters of the Dollar-Cost Averaging bot order page to make it easier for you to understand the following example.
Read More
How to Get Started with Dollar-Cost Averaging Trading on Bybit
Example 1
Suppose Trader A sets up a Dollar-Cost Averaging bot with the following parameters:
- Currency: USDT
- Select Cryptocurrencies: BTC and ETH
- Total Fixed Investment Amount: 1,000 USDT
- BTC Fixed Investment Amount: 600 USDT
- ETH Fixed Investment Amount: 400 USDT
- Investment Frequency: 1 week
- Max. investment amount for Dollar-Cost Averaging bot (Optional): 5,500 USDT
Assuming that Trader A invests for five weeks, according to the weekly investment frequency, Trader A automatically performs a total of five transactions. The specific details are as follows:
Please note that the system will automatically transfer the required amount of funds from your Bybit Funding account to the Trading Bot before each purchase.
During a five-week investment period, the average entry price for BTC and ETH is 28,200 USDT and 1,420 USDT, respectively, based on the following calculations:
BTC Avg. Enter Price (USDT): (29,000 + 28,000 + 27,000 + 28,000 + 29,000)/5
ETH Avg. Enter Price (USDT): (1,500 + 1,400 + 1,300 + 1,400 + 1,500)/5
In this case, Trader A buys 0.10645868 BTC at an average price of 28,200 USDT, and simultaneously buys 1.41245423 ETH at an average price of 1,420 USDT.
Benefits
Example 2
If Trader A does not invest in batches through the Dollar-Cost Averaging bot and buys BTC and ETH in one go with 5,000 USDT in the first week, the entry price and purchase quantity are as follows:
- BTC Fixed Investment Amount: 3,000 USDT
- ETH Fixed Investment Amount: 2,000 USDT
We can see in this case that for the same investment amount, more BTC and ETH can be obtained by using Dollar-Cost Averaging bot.
Note: In the above example, Trader A has set a max. investment amount of 5,500 USDT. Since the remaining 500 USDT isn’t enough to initiate the sixth auto-purchase — that is, each single investment is 1,000 USDT — the Dollar-Cost Averaging bot will automatically close after the fifth auto-purchase. At the same time, 0.10645868 BTC and 1.41245423 ETH in Trader A’s Dollar-Cost Averaging Bot will be returned to his Funding Account.
Assuming that Trader A does not set the Maximum Investment Amount and the available balance in the Funding Account is not enough for the next auto-purchase, Trader A will receive an email and notification to remind him to deposit funds into his Funding Account.
If Trader A fails to deposit sufficient funds in time for the next auto-purchase, the Dollar-Cost Averaging bot will be suspended. And after there are sufficient funds in the Funding Account, it will be activated again at the next auto-purchase time.
Please note that the suspension of Dollar-Cost Averaging bot due to insufficient funds will not automatically terminate it. If you want to terminate your Dollar-Cost Averaging bot, please close it manually.
Risk Warning
Trading bots involve significant risks and are not suitable for all investors. Before using Spot Grid or any automated trading strategy, you should carefully assess whether you fully understand how the strategy works and whether you can afford to take the high risk of losing your money.
- Market volatility risk: Trading bots operate based on predefined parameters and may perform poorly in highly volatile or rapidly trending markets.
- Strategy failure risk: A grid or algorithmic strategy may not adapt to sudden market reversals, low liquidity conditions, or unexpected price gaps, which may lead to significant or total losses.
- Technical and execution risk: Trading bots rely on system stability, connectivity, and exchange infrastructure. System outages, API delays, or execution errors may affect performance.
- Not protected: Trading bot usage and related cryptoasset investments are not covered by the Financial Services Compensation Scheme (FSCS) or any other investor protection scheme.
- Regulatory status: Cryptoasset trading services are not regulated by the Financial Conduct Authority. You should only use trading bots if you fully understand the risks involved.
- AI parameters are derived from historical backtesting and do not guarantee future returns.
- Some Trading Bots available on the platform are created by other users and not by Bybit. Bybit only provides the platform for strategy deployment and execution.