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A recent survey revealed that 59% of crypto investors support dollar-cost averaging (DCA) methodology as their primary investment strategy. This approach of investing a fixed amount on a regular basis is gaining popularity amidst the volatility of the cryptocurrency market.
DCA, a shield against cryptocurrency volatility
Exchange platform Kraken conducted this survey among 1,109 crypto investors in October 2024. This result highlights the growing appeal of DCA, especially in the context of high volatility in the cryptocurrency market.
46.13% of respondents cited protection against volatility as the main benefit of DCA. In fact, this strategy allows for more stable purchase prices over time, reducing the impact of short-term fluctuations.
Investors also appreciate the discipline DCA imposes, with 33% of them highlighting DCA's role in establishing consistent investment habits.
In particular, the uptake of DCA varies by age and income group. Young investors (18-29 years old) are more likely to try to 'time' the market, with 50% of them preferring this approach to DCA (41%).
In contrast, 77.70% of investors making more than $200,000 per year choose DCA, indicating a more conservative approach among high-income earners.
Between certainty and the temptation of timing
Despite the enthusiasm for DCA, the survey found that only 8.13% of supporters maintain their strategy in the face of losses. This data highlights the difficulty many investors have in sticking to their original plans during turbulent times.
High-income investors ($100,000 or more per year) express greater confidence in their ability to stick to their strategy, with 62.89% of them declaring they are “very confident” in the face of market fluctuations. are. This guarantee is in contrast to that of low-income investors, who may be more vulnerable to market uncertainty.
The study also highlights a special focus on the crypto market. 73.69% of investors monitor crypto market conditions more closely than traditional markets.
In conclusion, while DCA has emerged as a preferred strategy to weather the rough waters of the crypto market, the study highlights the persistence of emotional behavior in the face of volatility. This prompts investors to periodically reassess their risk tolerance and adherence to their initial strategy.
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Disclaimer
The views, ideas and opinions expressed in this article are solely those of the author and should not be construed as investment advice. Please do your own research before making any investment decisions.
