Dollar Cost Averaging is an investment technique in which an investor invests a fixed dollar amount at a set time interval regardless of the price of the share. Over the past six months many have reported consistent gains by using this method. For example one YouTuber made over $15000 by investing just $100 into LTC per week for 6 months. There are a certain number of fundamentals that make DCA a safer strategy for the cryptocurrency market:
This one is a given, it is very difficult to time peaks and dips in the cryptomarket. Often traders find themselves using complicated trading analysis techniques in order to invest to only find gains only marginally higher than those who just held. DCA makes certain that one gets a favorable average buying price per share or coin.
Investing a fixed amount per week regardless of the share price is a very disciplined strategy as well, those who stay firm to a specific investment strategy whether that's holding, or something else usually come out on top.
DCA is a flexible strategy in the sense that if a share/coin does tank exiting out would be a lot less painful than buying at the peak and selling low.
As with any sort of investment strategy there are definite risks, and more so with the volatile cryptocurrency market, but DCA combined with disciplined holding is as good of a strategy as any in my books.
Cheers
~Np
