Survey Reveals Crypto Investors Prefer Dollar-Cost Averaging Strategy

Recent research conducted by the crypto exchange Kraken indicates that nearly 60% of over 1,000 crypto investors surveyed primarily utilize dollar-cost averaging (DCA) as their investment approach.

Findings on Dollar-Cost Averaging Usage

The survey revealed that approximately 83.5% of participants have employed a DCA strategy at some point, while 59% continue to use it as their primary method for purchasing cryptocurrency. The data was released on October 7 and involved responses from 1,109 crypto investors.

Dollar-cost averaging refers to the practice of buying a fixed dollar amount of an asset at regular intervals, regardless of its price. This method is believed to mitigate the influence of price fluctuations and help eliminate emotional decision-making.

Benefits of Dollar-Cost Averaging

• Over 46% of respondents highlighted market volatility hedging as the key advantage of DCA.
• Approximately one-third indicated that it fosters consistent investment habits.
• About 12% stated that DCA helps to detach emotions from trading decisions.

Income Influence on DCA Strategy Usage

The advantages of a DCA strategy appear to differ with income levels. Respondents earning less than $50,000 mostly regarded DCA as a method to promote consistent investment behavior. In contrast, those earning above $50,000 viewed its ability to lessen market volatility as a more significant benefit. Among high earners, particularly those with incomes ranging from $175,000 to $199,000, a strong majority identified volatility reduction as the primary advantage of DCA.

Interestingly, only about 8% of participants adhered to their strategy during downturns, suggesting that individuals using alternative investment strategies were more inclined to maintain their positions amid market instability.

Kraken’s researchers noted that higher-income investors exhibit greater confidence in adhering to their trading plans throughout market fluctuations, with nearly 63% of those earning over $100,000 possessing a “very strong” commitment to their strategies during volatility.

Trends Among Age Groups

The survey also highlighted differences in DCA preference among age demographics. Young investors, particularly those aged 18 to 29, were more likely to engage in riskier strategies, with half opting to time the market instead. Conversely, older investors (over 45 years) showed a tendency to closely monitor crypto markets, with two-thirds actively checking market conditions more frequently than traditional investments. In contrast, only one-third of younger investors reported the same level of engagement.

Despite its imperfections, Kraken’s team remarked that dollar-cost averaging could alleviate the stress associated with timing the market and help prevent emotional decision-making.