A recent survey reveals that 59% of cryptoasset investors favor the Dollar Cost Average (DCA) method as their primary investment strategy. This approach, consisting of regularly investing a fixed amount, is gaining popularity in the face of fluctuations in the crypto market.
DCA, shield against crypto volatility
The Kraken exchange platform carried out this study in October 2024 with 1,109 crypto investors. The results highlight the growing appeal of DCA, particularly in a context of high volatility in the crypto market.
Protection against volatility is cited as the main advantage of DCA by 46.13% of respondents. This strategy makes it possible to smooth purchase prices over time, thus reducing the impact of short-term fluctuations.
Investors also appreciate the discipline that DCA imposes, with 33% highlighting its role in establishing consistent investing habits.
Notable fact, DCA adoption varies across age and income groups. Young investors (18-29 years old) are more inclined to try to “time” the market, with 50% of them preferring this approach to DCA (41%).
Conversely, 77.70% of investors earning more than $200,000 per year opt for DCA, reflecting a more conservative approach among high income earners.
Between conviction and temptation of timing
Despite the popularity of DCA, the survey reveals that only 8.13% of followers of this method maintain their strategy in the face of losses. This data highlights the difficulty for many investors to remain faithful to their initial plan during turbulent times.
High-income investors (more than $100,000 annually) show greater confidence in their ability to stick to their strategy, with 62.89% of them declaring themselves “very confident” in the face of market fluctuations. This assurance contrasts with that of investors with more modest incomes, who are potentially more vulnerable to market fluctuations.
The study also highlights the special attention paid to the crypto market: 73.69% of investors monitor crypto market conditions more than those of traditional markets.
In conclusion, if DCA stands out as a strategy of choice for navigating the tumultuous waters of the crypto market, the survey highlights the persistence of emotional behavior in the face of fluctuations. It invites investors to regularly reassess their risk tolerance and their adherence to their initial strategy.
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