Crypto investors mostly favor dollar-cost averaging (DCA) when buying into the market, a survey by crypto exchange Kraken has found.
Around 83.5% of investors had used a DCA strategy, and 59% still use it as their primary way to buy crypto, according to Kraken’s survey of 1,109 crypto investors published on Oct. 7.
Dollar-cost averaging involves buying an asset at regular intervals, such as once a month, regardless of price — which Kraken’s researchers claimed can “reduce the impact of short-term price volatility and remove emotions that can cloud judgment.”
Over 46% of those surveyed said the biggest advantage to DCA is hedging against market volatility, while around a third believed it supported consistent investment habits. About 12% said DCA removed emotion from trading.
The reasons for a DCA strategy change depending on income. Those earning less than $50,000 said the biggest benefit of the strategy was that it encouraged consistent investment habits.
Those earning over $50,000 pinned reducing the impact of market volatility as a greater advantage — especially for respondents earning between $175,000 to $199,000, where nearly seven in ten believed reducing market volatility impact was the biggest DCA advantage.
However, just over 8% of respondents maintained their strategy when facing losses, with the researchers adding that those using other investment strategies “were more likely to stay the course during market turbulence.”
“Our survey found that the more an investor earns, the more confident they are about sticking to their investment strategy,” the researchers stated.
Almost 63% of those with incomes over $100,000 said they have a “very strong” ability to stick to a trading plan when facing market fluctuations.
The survey found that higher-income investors earning more than $100,000 were more likely to use DCA while lower-income investors — those earning under $100,000 — were more likely to try timing the market.
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Younger investors aged between 18 and 29 also preferred riskier strategies, with half opting to try and time the market.
Kraken noted that older investors aged over 45 kept the closest eye on crypto markets, with two-thirds checking markets more often than traditional investments compared to only a third of those aged 18 to 29 who did the same.
The Kraken team said dollar-cost averaging is “not perfect” but claimed it could reduce the stress of timing the market and offset emotional decision-making.
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