A new survey from crypto exchange Kraken shows that the majority of investors in the digital asset space use the same strategy to gain exposure to the market.
Kraken’s research reports that 59% of market participants use a dollar-cost averaging (DCA) strategy to invest in crypto assets.
DCA refers to the practice of continuously buying into the market, regardless of price, rather than trying to time the market.
Kraken says,
“Because it provides a ‘set it and forget it’ way to steadily accumulate cryptocurrency over time, dollar-cost averaging has also become a popular trading strategy for investors looking to reduce the impact of short-term price volatility and emotions remove things that can cause confusion. judgement.
Our research found that a large majority (83.53%) of crypto investors have used dollar-cost averaging, and 59% of respondents use DCA as their primary crypto investment strategy.”
Survey respondents say some of DCA’s key benefits include hedging against market volatility, taking the emotion out of investing and tending to encourage consistent investing habits.
Kraken also says that investors making more than $100,000 a year are significantly more confident in their investment strategy and are less likely to turn around than those with lower incomes.
The research adds that people with lower incomes are more likely to try to time the market than adopt a DCA routine.
“Our research showed that the more an investor earns, the more confident they are in sticking to their investment strategy. 62.89% of those with incomes above $100,000 say they have a “very strong” ability to stick to a trading plan when faced with market fluctuations, a big jump from the 30% who earn less than $100,000 per years and who rate their ability to stick to a plan as ‘very strong.’
Lower income earners may face greater risk from trading losses as they are assumed to have less cash reserves and disposable income. Even if the markets turn against them for only a short period of time, lower-income crypto investors may be faced with a difficult decision that forces them to exit their investment. In 2022, only 78% of people earning $25,000 – $49,999 expect to be able to pay their monthly bills, compared to 94% of those earning more than $100,000.”
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Generated image: Midjourney