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Crypto Volatility & ‘Dollar Cost Averaging’
By Laxmikant Khanvilkar
Cryptocurrencies are a highly volatile asset class with wide price fluctuations ranging between 20% of either side and, the prolonged “crypto winter” has only added to traders woes.
Against such a backdrop, investors often take hasty decision and end up incurring heavy losses. The problem is they try to time the crypto market. There are some tried and tested measures.
As a matter of fact, some people use a strategy called Dollar Cost Averaging. Instead of buying in one lump sum, you spread out your purchases over a series of recurring buys.
One way to make sure you’re always buying at the right time is to set up recurring orders for your crypto currency purchases. By setting up a recurring order, you can average out the cost of your crypto currency purchases, meaning that you’ll always be buying at a consistent rate.
For example, if you set up a recurring order to purchase $100 worth of Bitcoin every week, you’ll be able to buy an equal amount of Bitcoin regardless of the current price. This means that you’ll never be buying at the wrong time, and you’ll always be able to take advantage of any dips in the market.
Setting up a recurring order is easy and can be done on most crypto currency exchanges. Recurring orders are ideal for those who want to build up their holdings in a regular and affordable manner, rather than buying large amounts of crypto at once.
All you need to do is select the currency you want to buy, how much you want to buy, and how often you want to buy it.
Remember, it is important to make sure you’re buying at the right time.
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