According to a recent survey by US crypto exchange Kraken, the vast majority of crypto investors prefer using dollar-cost averaging (DCA) as their investment strategy. The survey, which included 1,109 crypto investors, revealed that 83% of respondents have utilized DCA in the past to acquire coins, with 59% stating it as their primary investment approach.
Mark Greenberg, global head of asset growth and management at Kraken, emphasized the significance of DCA in the crypto market. He pointed out that DCA has been a successful strategy for the past 75 years and can help investors make more rational decisions by focusing on long-term goals rather than short-term market fluctuations.
Dollar-cost averaging involves gradually acquiring an asset over time through multiple purchases, as opposed to making a lump sum investment all at once. The survey participants highlighted various benefits of DCA, such as hedging against market volatility, encouraging consistent investment habits, and removing emotional biases from decision-making processes.
Interestingly, the survey found that the perspective on DCA varies based on investors’ income levels. Investors earning less than $50,000 a year valued consistent investment habits, while those making over $50,000 focused more on mitigating the impacts of market volatility. This suggests that lower-income investors may need more guidance in making investment decisions and sticking to a disciplined approach.
Moreover, the survey indicated that higher-income individuals are more inclined to continue DCA during market downturns, whereas lower-income investors may pause trading or cut losses. Additionally, older investors tend to monitor crypto markets more closely than traditional markets, with 66% of those between 45 and 60 checking crypto prices frequently.
In conclusion, the survey conducted by Kraken highlights the popularity and effectiveness of dollar-cost averaging among crypto investors. By adopting a disciplined and long-term approach to investing, individuals can navigate the volatile crypto market with more confidence and reduce the impact of emotional decision-making. As the crypto industry continues to evolve, strategies like DCA provide a stable foundation for investors to build their portfolios and achieve their financial goals.