In the Bitcoin investment journey, some people end up millionaires and others bankrupt. One of the differences between winners and losers is having the ability to remain calm in the face of market fluctuations or not.
While the Bitcoin rally can bring incredible opportunities for traders to profit, impulsive investments in this currency are always dangerous, as Bitcoin corrections could also be big. If you want to become a successful investor, good strategies alone are not enough: you also need to be in control of your emotions.
However, whoever it is, it is not possible to completely control our impulsiveness and our desire to earn Bitcoin fast, as we are human beings full of emotions. For this reason, you should know Dollar-Cost Averaging (DCA), the strategy that helps you avoid impulsiveness in investing in Bitcoin.
What is Dollar-Cost Averaging (DCA)
Dollar-Cost Averaging (DCA) is an investment strategy in which an investor divides the total amount to be invested in periodic purchases of a target asset such as Bitcoin. The purpose of doing this is to reduce the impact of volatility on the overall purchase.
Purchases take place independently of the asset’s price and at regular intervals. As a result, this strategy removes much of the detailed work of trying to time the market in order to buy stocks at the best prices.
In general, it is a constant automatic investment plan that makes buying little by little and generating profits little by little.
Is Dollar-Cost Averaging (DCA) the Best Strategy to Invest in Bitcoin?
Dollar Cost Averaging (DCA) advocates see it as a balanced investment strategy. With this strategy, the investor chooses a plan to buy small amounts of bitcoin at regular intervals.
In this way, although some price drops may go unnoticed, cases of buying too much at Bitcoin high and, consequently, ending up losing can be avoided.