Cryptocurrency investors are favoring the dollar-cost averaging (DCA) approach, according to a recent survey by Kraken. The survey, conducted with over 1,000 respondents, showed that 83.5% of investors have used DCA to purchase digital assets, with 59% still using it as their primary investment method. DCA involves buying a fixed dollar amount of cryptocurrency at regular intervals, regardless of price fluctuations. This strategy helps minimize the effects of short-term price swings and reduces emotional decision-making, which is crucial in the volatile world of cryptocurrency.
The survey highlighted that 46% of respondents see the main advantage of DCA as its ability to hedge against market volatility. Additionally, about one-third of participants valued DCA for encouraging consistent investment habits, while 12% appreciated its role in reducing emotional influence on trading decisions. Income levels also played a role in the appeal of DCA, with lower-income investors valuing disciplined investment habits, while higher-income individuals prioritized the strategy’s ability to reduce the impact of market volatility. Despite the widespread adoption of DCA, only about 8% of investors maintained this approach during periods of market losses, with high-income investors showing a stronger ability to stick to their investment strategy.
The survey also revealed differences in strategy preferences based on age, with younger investors more inclined toward riskier strategies such as timing the market, while older investors monitored crypto markets more closely. Recently, Kraken acquired Coin Meester B.V. (BCM), a registered crypto broker firm in the Netherlands, to strengthen its presence in Europe. Over the past two years, Kraken has expanded its operations across Europe by offering VASP services directly or through partnerships in multiple countries. However, Kraken has faced allegations from the SEC regarding violations of federal securities laws, claiming that some digital assets offered by the exchange should be classified as unregistered securities. Kraken has denied these accusations, stating that the assets in question do not meet the legal criteria to be considered securities.
Overall, the survey conducted by Kraken sheds light on the popularity of the dollar-cost averaging approach among cryptocurrency investors. This strategy is favored for its ability to mitigate market volatility, encourage disciplined investment habits, and reduce emotional decision-making. Income levels and age also play a role in the appeal of DCA, with high-income investors showing a greater ability to stick to their investment plans during market fluctuations. As Kraken continues to expand its operations in Europe and navigate regulatory challenges, the adoption of DCA as a preferred investment method highlights the importance of consistent and strategic approaches in the cryptocurrency market.
