A recent survey conducted by Kraken, a popular crypto exchange, has revealed that a majority of investors in the digital asset space are utilizing the same strategy to enter the market.
The survey, as reported by Krakenhere, shows that 59% of market participants are embracing a dollar cost averaging (DCA) approach to invest in crypto assets.
DCA involves consistently investing in the market over time regardless of price fluctuations, rather than trying to time the market.
Kraken explains, “Dollar-cost averaging provides a ‘set it and forget it’ method to gradually accumulate crypto assets, making it a popular strategy for investors looking to mitigate short-term price volatility and eliminate emotional decision-making.”
“Our survey indicates that a significant majority (83.53%) of crypto investors have adopted dollar-cost averaging, with 59% of respondents considering it their primary investment strategy.”
Survey participants highlighted the benefits of DCA, including hedging against market volatility, removing emotions from investing, and fostering consistent investment habits.
Furthermore, Kraken notes that investors with an income exceeding $100,000 are more confident in their investment strategy and less likely to change course compared to lower-income earners.
The survey also reveals that lower-income individuals are more inclined to attempt market timing rather than sticking to a DCA approach.
“The survey indicates that higher-earning investors exhibit greater confidence in adhering to their investment plan. 62.89% of individuals earning over $100,000 express a ‘very strong’ ability to stick to their strategy during market fluctuations, a significant increase from the 30% among those earning less than $100,000.”
“Lower-income investors may face higher risk from trading losses due to limited cash reserves and disposable income. Market downturns could prompt lower-income crypto investors to exit their investments. In 2022, only 78% of individuals earning $25,000-$49,999 expect to meet their monthly expenses, compared to 94% of those earning over $100,000.”
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