Effective Risk Management Strategy
Dollar-cost averaging has proven to be one of the best ways to manage the risk of cryptocurrency trading over the years. It works so well because it eliminates emotions from the trading process and protects users from extreme crypto market reactions. This is something each crypto trader likes to see.
Good Market Timing
Timing the crypto market well is a delicate process. No one seems to have an almighty formula on how to do it, especially as the market seems to develop a mind of its own at times. With Binance Auto-invest, this process is taken care of automatically.
Continued Earnings through Flexible Savings
Your purchased coins are deposited into your flexible savings account, ensuring that you keep earning on your crypto assets even after purchase.
Easy to Manage: You can easily edit, pause, or unpause the program whenever you like.
DRAWBACKS OF AUTO-INVEST
Sometimes, it gets the timing wrong is mainly because the market seems to rise upwards in the long term. Therefore, if you had invested a considerable sum of money in the cryptocurrency of your choice instead of dollar-cost averaging, it is more likely to be profitable in the long run.
For example, if you purchased BTC with 100 dollars when it first crossed $1 on February 9, 2011, you would have 100 BTC, which would currently be worth about five million dollars at the current price. Meanwhile, if you had used that same amount to purchase BTC over ten years, buying with ten dollars every day, you would not have up to half that number of BTC.
You could catch a falling knife: Catching a falling knife in the crypto investments world simply means buying a coin that will keep going down. If for some reason, a coin has lost its footing and is getting massively dumped, you could keep buying all the dumps and eventually end up as a bagholder(an owner of a lot of coins with negligible value).
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