A way to win without doing anything?
According to the latest survey results from the well-known cryptocurrency exchange Kraken, most investors choose a simple and effective strategy-Dollar Cost Averaging (DCA) when faced with the high volatility of the cryptocurrency market. to cope with risks and losses.
This survey report was released on October 7, 2024, and surveyed 1,109 cryptocurrency investors. The results showed that approximately 83.5% of the respondents had used the DCA strategy, and 59% of the investors stated that they still use it. Using DCA strategy.
What is DCA?
What is Dollar Cost Averaging (DCA)? The principle of DCA is simple and easy to understand - investors will ignore market fluctuations and prices and purchase a specific amount of cryptocurrency on a regular basis (or a regular basis) to spread investment costs in a highly volatile market and avoid investing a large amount at one time funds.
In Kraken's survey report, more than 46% of the respondents believed that the biggest advantage of DCA is that it can hedge market fluctuations and prevent investors from making irrational trading decisions due to large market fluctuations.
In addition, about one-third of respondents noted that DCA strategies help develop consistent and regular investing habits, while 12% believed that DCA can help them reduce the emotional interference of high-frequency trading and allow them to Maintain a healthy investment mentality.
Are there different strategies for different incomes or ages?
Interestingly, Kraken’s survey report shows that investors with higher incomes are more likely to stick to established investment strategies in the face of market fluctuations.
Image source: Kraken Different income groups have different views on DCA strategies
Nearly 63% of respondents with an annual income of more than US$100,000 choose the DCA strategy, while investors with lower incomes are more inclined to operate with high frequency and grasp market timing. This group of people may be more susceptible to short-term market fluctuations. Influence.
Additionally, the survey revealed clear differences between age groups. Half of young investors aged 18 to 29 prefer high-risk, high-reward strategies, while older investors aged over 45 prefer stable strategies such as DCA.
However, although most people agree with the DCA strategy, according to statistics, only 8% of the respondents can continue to adhere to the DCA strategy when facing losses, indicating that most people are still affected by emotions and market fluctuations , especially in extreme market conditions.
The Kraken team concluded that although DCA is not a perfect strategy and cannot guarantee investors profits, it can effectively reduce the pressure on investors during market fluctuations and help investors avoid emotional decisions and make unwise decisions. operate.
For those investors who are unable to accurately predict market trends or are unwilling to spend a lot of time studying market trends, the DCA strategy is more like a "lay down" victory method that does not pursue market manipulation, but maintains stable and consistent investments. Strategy.
Judging from the past price trend of Bitcoin ($BTC) alone, using the DCA strategy may bring more benefits than short-term operations.
[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views or conclusions contained in this article are appropriate for their particular circumstances. Invest accordingly and do so at your own risk.
