Crypto market may have dropped from all-time high. But dollar cost averaging still seems like the best way to make long-term profits, according to analystsdollars. Since the sale of Bitcoin (BTC) on April 19, the market has led the crypto space. Volatile markets like this can test the patience and fortitude of even seasoned traders and analysts, especially when calls for sustained bottoms are met with lower highs.
While the low trading volume and hard price action series provide whales with an excellent opportunity, they don’t give the average investor any chance, especially as millions of dollars of funds start to move in. The data shows that, rather than trying to time day trading and market bottom, dollar cost averaging (DCA) is the best method for individual investors looking to generate long-term profits in both the traditional and crypto markets.
Analisdollarser: It makes sense to apply the dollar cost averaging strategy for Bitcoin
In a statement, Coin Metrics noted that investors who invested in Bitcoin (BTC) with an average dollar cost starting from the December 2017 peak are still in profit three years later. Coin Metrics tweeted: “Although Bitcoin is still trading 30% below ATHs, the average dollar cost from the market peak from December 2017 is 61% per year. 8 or 20%. It would yield 1 return. Similarly, Ethereum (still 71% down from its peak) average dollar cost from January 2018 would yield an annualized return of 87.6%, or 27.9%. ”
Although the chart shows data for an old time as the range of 2017 and 2020, it is clearly seen that it leads to a general increase in portfolio value in the long run. Currently, BTC is down almost 47% from its all-time high of $64,863. With this decline, Bitcoin continues to send mixed signals to the cryptocurrency market. In this process, according to analystsdollarser, applying the dollar cost averaging strategy may be a logical move. Bitcoin (BTC) price and detailed market data here
There’s more to investing in Bitcoin (BTC) than just “buying the bottom”!
Let’s take a look at the results of dollar-to-cost averaging across multiple cryptocurrencies from 2017-2018 to the end of June 2021. For the starting point of each analysis, we base the day when the token hits its all-time high in the 2017-2018 bull market and assume $10 weekly investments have been applied from that point forward. The peak for Bitcoin during the cycle came on December 15, 2017, when Bitcoin (BTC) was trading for $19,497, according to CoinMarketCap data.
CostAVG. Using the dollar cost average estimator provided by .com, if you had $10 daily invested in Bitcoin (BTC) from December 15, 2017 to June 30, 2021, the total investment of $1,850 would be worth $7,519, up 306%. . If asked the opinion of most fund managers or investors who make a living in the traditional investing world, a 306% increase in portfolio value over a four-year period is an amazing rate of return.
Analisdollarser: Ethereum provides a huge return compared to Bitcoin!
The price of Ether (ETH) skyrocketed from the end of 2020 to the beginning of 2021 as the rise of decentralized finance (DeFi) and immutable tokens (NFT) increased the usage of the Ethereum smart contract Blockchain and increased the demand for ETH. The increased demand pushed the price of Ether to $4,363 on May 12, 2021, but its price has since dropped by nearly 50% since then to trade below $2,200. During the 2017 bull market, ETH price reached an all-time high of $1,396 on January 12, 2018.
Investors using the dollar cost averaging strategy and investing $10 per month starting from the top could make a total investment of $1,810 at the current price of Ether, for $15,507. This represents an increase of 757%, which is an excellent rate in the crypto market. Related to this, Ethereum 2.0 is approaching the milestone with 0.6 million staked ETH. As you’ll see, the percentage of earnings for Ether is more than double what it would be for Bitcoin, giving some confidence to those who argue that Ethereum has been a better investment over the past few years.
Small-cap altcoin projects also benefit from the dollar cost averaging strategy
To illustrate the benefit of applying the dollar cost averaging strategy to small-cap altcoins, let’s do a quick analysis of THETA, one of the emerging stars of 2021. THETA started a parabolic price surge in December 2020, and its price rose from about $0.80 to $2.40 by January 1, 2021. Then, it skyrocketed to an all-time high of $14.28 on April 15.
Blockchaincenter that offers data for the average dollar cost of various tokens with a $10 daily investment. net, if an investor had started investing in THETA on January 1, 2018, the cumulative investment of $12,480 is now 5%. 000 increase would have been worth more than $638,000. While we can’t say that all altcoins have performed as well as THETA during this time, according to analysts, THETA is a good example of how consistently investing in a smaller-capital project can reward patient investors.
The benefit of this strategy for Bitcoin and altcoins
Cryptocoin. com, the biggest advantage of dollar-cost averaging is that it removes emotion from the investment process. It allows the trader to focus on other things, meaning you don’t have to be in front of the screen all the time because day traders spend saadollars behind screens and often take more losses than gains.
It also eliminates the need to search for the highs and lows of the market and allows investors to invest in a variety of assets in a measured and consistent manner. No technique is perfect and not every crypto project can make significant gains or even survive until the next bull market cycle. However, according to analystsdollars, dollar cost averaging is an approach that provides consistent results for both amateur and expert investors.
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