Introduction

In the volatile world of cryptocurrency, investors often grapple with the challenge of determining the right time to buy or sell assets. Given the unpredictable price swings, even seasoned investors can find it difficult to time the market perfectly. This is where the Dollar-Cost Averaging (DCA) strategy comes into play. DCA is a time-tested investment approach that can help mitigate the risks associated with market volatility and provide a disciplined method of building a cryptocurrency portfolio.

What is Dollar-Cost Averaging (DCA)?

Dollar-Cost Averaging (DCA) is an investment strategy where an investor divides their total investment amount into periodic purchases of a target asset, regardless of the asset's price at the time. Instead of trying to time the market, the investor buys a fixed dollar amount of the cryptocurrency at regular intervals (e.g., weekly, bi-weekly, or monthly). This method reduces the impact of market volatility, as the investor buys more units when prices are low and fewer units when prices are high.

For example, if you plan to invest $1,200 in Bitcoin over the course of a year, rather than investing the entire sum at once, you could invest $100 each month. This approach ensures that you are not overly exposed to the risk of buying at a peak price.

Advantages of the DCA Strategy in Cryptocurrency

1. Mitigation of Market Volatility

Cryptocurrency markets are notoriously volatile, with prices often experiencing significant fluctuations in short periods. DCA helps smooth out these price swings by spreading purchases over time, reducing the risk of making a large investment at an inopportune moment.

2. Emotional Discipline

One of the biggest challenges in investing is managing emotions, especially in a market as speculative as cryptocurrency. Fear of missing out (FOMO) and panic selling during downturns can lead to poor investment decisions. DCA instills a sense of discipline by committing the investor to a pre-determined investment schedule, regardless of market conditions. This reduces the likelihood of making impulsive decisions based on short-term market movements.

3. Lower Average Cost

Since DCA involves purchasing assets at different prices over time, it often results in a lower average cost per unit. During market dips, your regular investment buys more of the asset, effectively lowering your overall average cost. Over time, this can enhance potential returns when the market trends upward.

4. Simplicity and Convenience

The DCA strategy is straightforward and easy to implement. It requires minimal decision-making, as the investor only needs to determine the investment amount and frequency. This simplicity makes it accessible to both novice and experienced investors. Additionally, many cryptocurrency exchanges and platforms offer automated DCA options, allowing investors to set up their investment schedule and let the platform handle the rest.

5. Risk Reduction

By spreading investments over time, DCA reduces the risk of committing a large sum of money during a market peak. While it doesn’t eliminate risk entirely, it does help avoid the potential pitfalls of lump-sum investing, where poor timing can lead to significant short-term losses.

Considerations When Using DCA in Cryptocurrency

While DCA is a powerful strategy, it's essential to understand that it doesn't guarantee profits or protect against losses in a declining market. If the price of the cryptocurrency continues to fall over an extended period, the value of your investment may decrease, even with DCA. Additionally, transaction fees on some cryptocurrency exchanges can accumulate over time with frequent purchases, potentially eating into your investment returns.

Moreover, DCA works best as a long-term strategy. Investors who are patient and committed to a long-term investment horizon are more likely to see the benefits of this approach.

Conclusion

Dollar-Cost Averaging (DCA) is a prudent strategy for investors looking to navigate the volatile and unpredictable cryptocurrency markets. By spreading out investments over time, DCA minimizes the impact of market volatility, encourages emotional discipline, and often leads to a lower average cost per unit. While it's not a foolproof method, it provides a systematic and relatively low-risk way to build a cryptocurrency portfolio, making it an attractive option for both new and seasoned investors. As with any investment strategy, it's crucial to do your research and consider your financial goals and risk tolerance before implementing DCA.

Multiple issuers in Hong Kong stated the Securities and Futures Commission had approved spot Bitcoin and Ethereum ETF applications. Let’s dig deeper. 

Ethereum

Accounting giant Ernst & Young has launched a new blockchain tool to simplify complex business agreements, reduce costs, and ensure security. 

Technology

Polkadot founder Gavin Wood has introduced the Gray Paper outlining the upcoming Join-Accumulate Machine (JAM) upgrade for the network.

The Worldcoin Foundation is launching the Layer-2 blockchain, World Chain, which will integrate novel authentication methods and prioritize human users to address scalability issues and enhance network efficiency.

Leading crypto exchange OKX has officially launched the public mainnet of its Layer-2 solution, X Layer, to drive adoption and innovation in decentralized applications.

Business

The Polkadot community has proposed a $8.8 million sponsorship deal with Lionel Messi’s Inter Miami football club as the protocol is to amplify its global presence. 

Leading smart contract wallet provider Safe is enhancing its blockchain solutions by acquiring wallet management software provider Multis. 

Two top OKX executives, Global Government Relations Chief Tim Byun and product chief Wei Lan, have departed the exchange. 

NFT

PayPal announced changes to its Seller Protection Program, removing protection for Non-Fungible Token (NFT) transactions from May 20. Furthermore, NFT sales with a transaction amount of $10,000 or higher are also no longer protected by the company against false claims, chargebacks, or other financial scams targeting sellers. 

Security

Mango Markets Exploiter Avraham Avi Eisenberg has been convicted of fraud and manipulation charges related to the Mango Markets exploit by a federal court in Manhattan. 

Regulations

Canada announced plans to adopt the International Crypto-Asset Reporting Framework (CARF) by 2026, leading the charge in global crypto tax regulation with stringent reporting requirements for crypto asset service providers.

In a major development, Binance has announced its return to India as an entity registered with the Financial Intelligence Unit of the Finance Ministry, which oversees trades conducted in virtual digital assets. The Indian government banned the world’s largest cryptocurrency exchange in January, but it has now committed to adhering to all relevant laws, including the PMLA and the VDA taxation framework. 

Democratic Senator and known crypto skeptic Sherrod Brown has expressed conditional support for stablecoin legislation, signaling potential progress amidst longstanding regulatory challenges.

Multiple issuers in Hong Kong stated the Securities and Futures Commission had approved spot Bitcoin and Ethereum ETF applications.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice. 

随着加密经济的发展，所有资产都转移到链上，将有更多交易所出现。

作者：MASON NYSTROM

编译：深潮TechFlow

加密货币的超级力量是创造新的资产和市场。

因此，加密货币中最常见且成功的商业模式之一就是交易所模型。如果你在加密货币领域待了一段时间，这并不令人惊讶，但我认为在评估加密公司和协议时，这一模式常常被低估。

交易所可以出现在多种场景中，但通常为某种资产或服务创建交易场所，并提供处理这些交易的机制。

如今，我尝试问自己一个问题——这个协议或业务如何能够成为一个交易所？对于某些业务来说，这一点非常明显，但对于其他业务，则需要一些想象力。

一条普遍的经验法则是——应用与交易的接近程度越高，初创应用转变为交易所的可能性就越大。这对于执行交易的应用（例如，兑换）是直观的，但对于处于堆栈特权位置的应用（例如，在价值流中）或起初作为 SaaS 产品但可以发展为拥有强大市场的平台的应用同样成立。

交易所适合在以下场景中发展：

新资产在链上出现

应用控制分发并可以引入交易行为

新服务出现，影响有价值的链上状态或与交易有所关联

加密游戏控制自己的资产发行并拥有开放经济

开发者平台可以引入服务市场或拍卖行进行交易

当新资产在链上出现时

这是交易所最有可能出现的明显场景。Coinbase 创建了一个比特币市场。早期参与者如 Etherdelta 展示了对交易长尾代币的市场需求，尽管后来的竞争者 Uniswap 成为主导场所。对于新创建的资产如 NFTs（例如，Superrare、Opensea）以及衍生资产如稳定币（例如，Curve）和永续合约（例如，Deribit、dydx 等），情况也是如此。

当然，并非所有交易所都能成功或拥有相似的护城河。一些新资产如 ERC 1155 或比特币序列号更适合由现有交易所（例如，Magic Eden）来服务，而不是新兴交易所。基于新资产的交易所通常在拥有流动性网络效应、控制最终用户分发或作为其交易的基础资产的特权发行者时，防御能力最强。

控制分发的应用

一般而言，控制最终用户分发使得应用能够升级为交易所。Phantom 和 MetaMask 是钱包，但 MetaMask Swaps 的出现使所有钱包都变成了交易所。Telegram 机器人是交易所，但位于用户更方便的地方——他们的直接消息中。社交应用如 Farcaster、Lens 和 Unlonely 提供内置交易功能，用于在分发点交换资产——如 meme 代币、NFT、积分等。同样，Solana 的 blinks 现在为任何应用实现应用内交易并成为交易所提供了一种模型。

未来，我预计更多以分发为重点的应用将利用类似于 Solana blinks、Farcaster frames 或 Lens open actions 的原语提供应用内交易。历史上，web2 应用被迫将用户引导到其他平台进行交易，但现在区块链可以在分发点提供交易，这意味着所有应用都可以成为市场。

新服务的市场

影响有价值链上状态或与交易有某种关联的服务提供商，具备成为交易所的能力。例如，预言机将外部数据（如股票价格数据）引入链上，这可能影响其他资产的链上价格，触发清算，或导致套利，从而产生预言机可提取价值（OEV）的实例。像 Pyth 这样的预言机提供商通过创建将交易与预言机更新捆绑的拍卖，进入交易所模型，并让人们为优先处理交易支付费用。桥接和跨链互操作性服务自然充当交易所，通过类似方式控制资产价格。

更为新兴的是 ZK 证明市场和必须在链上提交的服务。因此，ZK 证明市场（例如 Gevolut）和聚合器（例如 Nebra）将不得不与交易和其他证明生成器竞争稀缺的区块空间。尽管证明服务领域正在发展，领先的提供商将从规模经济中受益（更多证明 → 更多聚合 → 更便宜的证明 – 更多证明），这可能使这些服务市场成为有价值的交易所。

加密游戏

web2 游戏与 web3 之间一个显著的区别是向拥有可转移资产的开放经济的转变。由于像 Axie 这样的加密游戏通常控制资产的发行和流通速度（例如，周转率），它们可以垂直化自己的游戏内交易所或以其他方式充当资产经纪人。这自然为 web3 游戏提供了引入交易所业务的机会。

开发者平台作为市场或拍卖行

开发者平台的情况稍微不那么明显，但它们受益于规模经济，并在堆栈中占据特权位置，使它们与交易保持密切联系。

作为服务的 Rollup 提供商（RaaS），例如 Conduit 和 Caldera，也具备通过创建自己的分片排序器插入价值流的能力，这些排序器成为 RaaS 支持链的交易排序焦点。虽然共享排序器当然可以自行排序区块，但它们也可以拍卖交易并捕获 MEV（矿工可提取价值）。

另一个核心的开发者基础设施是钱包即服务提供商（即 Dynamic、Crossmint、Privy），它们能够连接用户资金跨越不同应用，提供粘性的用户和开发者体验。借助这种锁定，WaaS 提供商提供应用内交易、上下车交换，可能还会提供类似的钱包交换插件功能。

随着加密经济的发展，所有资产都转移到链上，我们无疑将看到更多交易所的出现。