Most crypto investors use Dollar Cost Averaging for stability
A recent survey by Kraken reveals that a majority of cryptocurrency investors prefer the Dollar Cost Averaging (DCA) strategy.
This method, which involves regularly investing a set amount regardless of market conditions, is popular for its ability to minimise emotional decision-making and reduce the impact of short-term volatility.
According to Kraken’s findings, 59% of surveyed participants use DCA as their primary approach for accumulating crypto assets.
The study highlights that DCA offers a disciplined, “set it and forget it” strategy, which has gained traction in the crypto market due to its focus on gradual growth over time.
Investors report that this method helps them stay consistent and avoid the stress associated with frequent market fluctuations.
Kraken states that DCA works similarly to contributing regularly to an individual retirement account, though the risk level is higher in the crypto space due to the price volatility of assets like Bitcoin (CRYPTO:BTC) and altcoins.
Income levels also play a significant role in investors' choices.
The survey shows that high-income investors, earning over $100,000 annually, are more likely to stick to their plans during market changes.
These investors have greater financial stability, allowing them to maintain their investment strategy without making reactive decisions.
On the other hand, lower-income investors tend to lean toward market timing, which exposes them to greater risks, especially when their disposable income is limited.
“Higher-income investors are better able to adhere to their trading plans amidst market fluctuations,” according to Kraken’s analysis.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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