Dollar-Cost Averaging is a strategy where an investor divides up the total amount they want to invest in a particular asset, such as cryptocurrency, into smaller increments and then buys at regular intervals, regardless of the asset’s price. This approach helps reduce the impact of volatility on the investment.
By purchasing smaller amounts over time, Dollar-Cost Averaging allows investors to potentially buy an asset at various price points, averaging out their purchase price. This strategy helps to mitigate the risk of investing a large sum of money at a single point in time, as the investor avoids the ups and downs of the market by spreading out their purchases.
Overall, Dollar-Cost Averaging can help investors build a more diversified portfolio and reduce the risk associated with trying to time the market or predict short-term price movements. It is a disciplined and long-term approach to investing in assets like cryptocurrency.
