People often wonder: when is it convenient to buy B๐พ๐๐ธo๐พ๐? Do I have to buy today, tomorrow or in 2 weeks? There is no answer to this question because the crypto market is highly variable. However, there is a long-term strategy, based on mathematical averages, which allows you to buy at a lower price than the total average. You will not buy everything neither at high nor low prices but at medium prices.
This is the "๐ป๐ ๐๐๐๐ฃ โ๐ ๐ค๐ฅ ๐ธ๐ง๐๐ฃ๐๐๐๐๐" strategy.
DOLLAR COST AVERAGING STRATEGY
What is it, in practice? First, the overall budget that you are willing to invest must be decided.
For example $ 1200 (BTC). Of these $ 200 I can put them aside (and use them at the time of maximum price drop).
I won't have to buy the other $ 1000 all together: in fact this tranche will be divided into several sections (for example 100 or 50 $ at a time).
By always investing the same amount at regular intervals (once a week or month), you will be immune to the risk of investing all your money at a time of maximum evaluation ("buy high").
Obviously in doing so you will also have the certainty of not investing when the markets are at their lowest (but nobody forbids you to make an additional investment with the other $ 200 that we had set aside).
For a mathematical question, investing with the Dollar Cost Averaging methodology, you will buy, on average, lower than the average.
The reason is very simple: by always investing the same amount of money each period, you will buy more when the market is low and less when it is high.
By investing similar figures at regular intervals, you are sheltered from market fluctuations by maximizing long-term returns.
This method allows you to accumulate wealth slowly and steadily, without risk.
With Dollar Cost Averaging, volatility is something that favors the investor, as it presents low-cost buying opportunities, resulting in a better average price.
When you are in the accumulation phase you should obviously be happy if BTC collapses.
This is an example:
If the average volatility fluctuates from + 20% to -20% in the period in which you buy, you will buy at a slightly below average price.
If we are in the presence of high volatility with higher %, the purchase will take place at prices well below the average.