Buy Bitcoin: Why Dollar Cost Averaging Is the Crypto Investors Best Bet

Investing isnt as easy as it seems on the surface, especially when in comes to a highly volatile, high-risk, emerging asset like Bitcoin and other crypto assets. Much research and due diligence is required by the investor to ensure their investments are fundamentally sound, and their price charts display positive technical setups before taking a chance to buy Bitcoin.

Learning to trade, or time the market by buying high and selling low, is often a zero sum game for any inexperienced investors, crypto markets or otherwise. Instead, price action in Bitcoin price charts over the last year shows that simply setting up a recurring buy and dollar-cost averaging into cryptocurrencies is by far a less risky strategy for most novice crypto investors looking to buy Bitcoin for the first time.


Crypto Investors Should Consider DCA Investment Strategy To Buy Bitcoin

Volume profiles of the Bitcoin bear market bottom shows that crypto investors eyeballing the lowest prices the crypto asset saw in over a year were hesitant to pull the trigger, missing the best possible buying opportunity.

Related Reading | Bitcoin Price Targets at Bottom Show That Crypto Markets Are Unpredictable

But buying at the bottom is extremely difficult, takes strong hands, nerves of steel, and years of experience in contrarian market trading. Equally as difficult is properly spotting a top. In hindsight, its easier, as the irrational exuberance can be cut with a knife, but its always harder to sell on the way up than it is on the way down.

Crypto investors or any market trader aim to buy these bottoms and sell tops to maximize profitability and return on investment. But even the most experienced traders could be forced to watch in dismay as the market moves in the opposite direction of their setup.

A much more effective solution, according to one crypto analysts analysis of Bitcoin price action over the last year. The research concludes that if an investor had bought into Bitcoin one time per day dollar-cost averaging for the last 365 days, would have resulted in an average buy of roughly $5,500.

Related Reading | Only 3 Months Exist Where Buying Bitcoin Resulted in Losses

Such an average buy in would have nearly doubled the investors return at the recent local high of $9100. The average buy-in number takes into account two peaks at $9,000 and $8,000 prior to the break of support at $6,000, as well as the lows set around $3,000.

Yes, the average buy in is over $2,000 above the bear market bottom, however, the number also reached almost $4,000 over the average buy in at the local high, adding further credence that DCA is the best strategy for new investors seeking to minimize risk and take a less hands on approach.

Many crypto exchanges and wallet apps now offer ways to set up recurring buys, effectively allowing investors to dollar-cost average into assets without a second thought.

The idea is that with Bitcoin potentially able to reach prices of $100,000 to even millions per BTC, missing a bottom by a couple thousand dollars isnt going to make a major difference, and that consistently buying before prices take off further is the wisest choice.

The post Buy Bitcoin: Why Dollar Cost Averaging Is the Crypto Investors Best Bet appeared first on NewsBTC.

05.06.2019 / 13:50 59
Investors Wont Call Bitcoin (BTC) Bottom, But Accumulating Crypto Now Still Works Investors Wont Call Bitcoin (BTC)
The Elusive Bitcoin Bottom Bottom this. Bottom that. Since the value of cryptocurrencies began to stumble at the start of 2018, investors have done
VC Investor Tim Draper Made $89M From His Bitcoin Investment in 5 Years VC Investor Tim Draper Made $89M From
Billionaire venture capital investor Tim Draper has made $89.1 million from his Bitcoin investment in less than five years. In 2014, Tim Draper
Reports Claim Investors Lost Homes as Bitcoin Crashed, Isnt the Stock Market the Same? Reports Claim Investors Lost Homes as
TweetShare Sky News, a British TV station and mainstream media outlet, reported that investors lost homes as the Bitcoin price crashed. But, the same
Was Billionaire Investor Novogratz Corrrect? Crypto Market Shows Signs of Bottom Was Billionaire Investor Novogratz
Billionaire investor and hedge fund legend Mike Novogratz could be right after all. Since he called a bottom in the crypto market on September 13,
US Gallup Poll Shows Only 2% of American Investors Own Bitcoin US Gallup Poll Shows Only 2% of
According to a Wells Fargo Gallup Investor and Retirement Optimism Index poll, just 2 percent of Americans surveyed own bitcoin. The poll is based on
One of the Biggest VC Firms Says Cryptocurrency Can be Worth Trillions of Dollars One of the Biggest VC Firms Says
Union Square Ventures, a New York-based venture capital firm that oversees a billion dollars in capital, has revealed that it is investing in
Comments (0)
Add a comment
Comment on