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BEGINNERS GUIDE Crypto Weekly
Dollar-Cost Averaging decision-making. Dollar-cost averaging (DCA) lets you invest a smaller amount into an asset on a regular schedule. It's like buying groceries every week instead of stocking up once or twice per year. You can even set it and forget it with recurring investments that happen automatically at scheduled intervals. As with any investment, cryptocurrencies volatility may cause uncertainty, fear of missing out, or fear of participating at all. When prices fluctuate, how do you know when to buy? It's the age-old advice: buy low, sell high. But how do you find that magic moment when prices are at their lowest?
D
ollar-Cost Averaging (DCA) is a commonly used investment strategy useful to cryptocurrency investors, new and old alike, especially during market volatility. While dollarcost averaging is not a guarantee to hit the jackpot, time and time again, it has shown positive results in terms of reducing risk and increasing returns over time. While this article will not go into all the details and nuances of DCA, we will discuss what it is and why you may want (or may not want) to use it for your investments. By understanding how DCA works and its benefits/drawbacks, you will better understand an essential aspect of investing in cryptocurrencies. Let's get started!
December 2021 | Volume 05
The Problem: Market Volatility Financial markets (especially cryptocurrency) are highly volatile and speculative - meaning prices of cryptocurrencies are subject to sudden, dramatic changes in value. In addition, no central authority or government agency is overseeing the crypto market. As such, it can be difficult for investors to predict how prices will change over time. While the market may be hard to predict, there are ways to reduce your risk and exposure.
Dollar-cost averaging (DCA) is an investment strategy used by many cryptocurrency investors to reduce the volatility of market fluctuations. By investing at regular intervals, you increase your chances of success. This strategy enables investors to "average" out the cost of purchases over time and reduce the overall impact of market volatility and price drops. DCA is also
One Solution: Dollar-Cost Averaging (DCA) A critical key to being a successful investor is to take emotion out of your
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