The Smart Small Investor’s Facing a Currency Crash ; A small investor decided to enter the world of cryptocurrencies with only $100. After quick research, he bought a new cryptocurrency at a price of $0.01 per coin, giving him 10,000 coins.
However, shortly after, the price of the coin dropped by 50% to $0.005, reducing his investment to just $50. Instead of panicking, he decided to apply the dollar-cost averaging strategy by buying more gradually.
When the price reached $0.005, he bought 10,000 more coins for $50.
As the price fell to $0.002, he bought 25,000 coins for another $50.
When the price dropped to $0.001, he bought 50,000 coins for another $50.
Now, he owns 95,000 coins, and his total investment is $250, making his average purchase price $0.00263 per coin.
If the price rises again to $0.005, his holdings will be worth:
95,000 × $0.005 = $475, meaning a $225 profit.
If the price returns to $0.01, he will have $950, making a $700 profit!
Warning
Although this strategy can be profitable, it carries significant risks! The price may continue to fall if the project is weak, turns out to be a scam, or lacks real demand. Therefore, always research carefully and never invest money you cannot afford to lose.