#MyStrategyEvolution

If you are unfamiliar with the basics of trading cryptocurrencies, check out the simplest strategy that works best over the long term.

The Dollar-Cost Averaging strategy is based on systematically investing in a chosen asset at regular intervals, regardless of its current market price. The key assumption of this method is to spread the investment over time, which helps minimize the risk associated with short-term price fluctuations. In practice, this means that the investor sets a fixed amount to invest regularly – for example, weekly, monthly, or quarterly – regardless of whether the asset price is rising or falling.

Why is spreading investments over time beneficial?

Financial markets, especially the cryptocurrency market, are known for their high volatility. Prices can rise or fall sharply in a short period, making it extremely difficult to predict the best moments to buy, even for experienced investors. DCA eliminates the temptation of "timing" the market, i.e., trying to predict when it is worth buying assets at the lowest possible price.

The mechanics of DCA:

Regular purchases: You set a fixed amount that you will invest at a specific time, e.g., 100 USD per month in BTC. Regardless of what the price is at that moment, you make a regular purchase, for example, on the first day of each month.

Buying more for less: When the asset price falls, you can buy more units for the same amount (e.g., when bitcoin drops from 50,000 USD to 40,000 USD, you buy significantly more for that same amount). Conversely, when the price rises, you will buy fewer units.

Averaging costs: Because investments are made during both price increases and decreases, the average purchase price of the asset can be lower than in the case of a one-time purchase, especially when the market is volatile. As a result, the investor does not overpay by buying assets at too high a price but also does not miss opportunities when the price is low.