Dollar-Cost Averaging. What Is It?


Even experienced investors can find it difficult to navigate the volatile crypto market. A popular approach to investing is to invest over a long period of time, which reduces the impact of market volatility. This article explains how and why investors benefit from recurring investment strategies.


Since the crypto market is unpredictable, traders and investors have a difficult time "timing" the market and predicting when to enter and exit for profitable trades. As a way to alleviate the effects of market volatility and get rid of the pressure of timing the market, many investors use recurring investment strategies.


Dollar-Cost Averaging. What Is It?


Dollar-Cost Averaging is an investment made on a regular basis. By investing small amounts on a regular basis, one is able to build up their portfolio by using the Dollar-Cost Averaging (DCA) strategy. Investing in traditional investments or cryptocurrencies can enable investors to potentially acquire more assets for less than if they made a one-time investment.


As you increase your crypto portfolio with new funds consistently, recurring investments allow you to spread out your investments over time. Token prices, revenue, and profits will grow along with crypto projects as the space develops. As you accumulate assets regularly, you won't miss out on their growth if you invest over a longer period of time.


By making recurring investments, you can minimise the impact and risks of the volatile crypto market. Spreading your investments out allows you to ride out market fluctuations. Investing in several sectors also smoothes out market fluctuations. Due to the fact that you break your investments into smaller chunks, you are also able to invest with in your budget each month, allowing you to increase or decrease your investment amounts depending on your current financial situation.


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Cryptocurrency investments come with high market risks. BlueBit is not liable for any trading losses. This article is for informational purposes only.