There are strategies that you can employ to minimize the risk and volatility, while also maintaining a healthy portfolio diversification.One such strategy is dollar cost averaging , which allows you to invest in a disciplined and steady manner. DCA also has other inherent benefits which we’ll discuss below.
The idea behind dollar-cost averaging not only focuses on accumulating assets over time, but also distributes the risk from the volatility and price fluctuations over this span of time.Additionally, this approach eliminates the need to time the market and minimize psychological bias when making investment decisions based on short-term price changes.Dollar cost averaging in the crypto market involves investing a fixed amount of money at regular intervals, typically on a weekly or monthly basis.
You also have the option of making modifications to your DCA strategy depending on the market condition.
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