How to Build a Life-Changing Crypto Portfolio with DCA

dollar cost averaging or DCA is not only one of the easiest ways to invest but can also be one of the most rewarding investors have been using DCA strategies for Generations but it's safe to say that the gains your grandparents made dcing into traditional Investments are nothing compared to what you could potentially gain by dcing into crypto that's why today we're going to tell you everything you need to know about the DCA investing strategy and how you can use it to create a life-changing crypto portfolio stay tuned folks this is a video you literally can't

afford to miss okay before we go any further you need to know that I'm not a financial adviser and nothing in this video should be considered Financial or investment advice this video is purely for entertainment and educational purposes only it's also important to note that most of this video is based on a recent survey from kraken's learn team which asked crypto investors about their DCA strategies we'll leave a link to that survey in the description and we'll come back to it a little later on for now though let's first give a bit of context so

if you're not familiar with DCA here's everything you need to know DCA stands for dollar cost averaging and is probably one of the most stressfree ways to invest in this crazy Market of ours essentially it's where you invest a regular amount into a cryptocurrency at a regular interval regardless of the price price of that asset at the time now there's no hard and fast rule on how often these Investments occur so it's completely up to you and your own preferences so as an example you may choose to invest $100 into BTC on the first day

of every month alternatively you could invest $10 every single day or maybe you'd prefer to invest $1,000 every two weeks the choices here are endless but the key takeaway is that you are consistently investing some amount on a regular basis and not giving it too much thought a popular saying is set it and forget it now the reason investors DCA is because on average you can make about the same amount of gains as you would if you were actively trading crypto unless you've got all the Time in the World to keep an eye on the

charts and make no mistake trading is a full-time job and you have the skills to take on asset managers prot Traders and Bots then a simple DCA strategy could be a relatively stressfree way of getting a similar result and at the end of the day that's what counts but there are other benefits too for example dcing can help you stay disciplined in your investment approach particularly if it's automated most centralized exchanges have tools to help you set up regular Investments and give you the flexibility to choose the amount and the frequency of those Investments Investments

and because a DCA strategy helps you to minimize your exposure to volatility it can even help reduce your average cost of investment of course this really depends though on where those investment intervals fall relative to the assets price at the time but given how volatile the crypto Market is it's highly unlikely that you'll be able to time the market right every single time yourself and by the way if you're enjoying the video so far obliterate that like button to give it a boost decimate that subscribe button and give that notification Bell just a gentle nudge

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than this piece of succulent protein Rich nutritious grilled chicken [Music] head on over to coin bureau.com deals or click the link in the description below don't delay check out the coin Bureau deals page today these deals are so hot I need to cool [Music] down yeah so with that context in mind let's turn turned back to that Kraken survey it discovered that today 59% of crypto investors invest using a DCA strategy while just 30% will try to time the market what's quite staggering is that the survey also reveals that out of the 1100 people questioned

a whopping 83% said they had used a DCA strategy at some point this underscores just how simple and effective such a strategy can be recall that besides being the easiest way to invest into crypto the key benefit of DCA is that it allows you to reduce your exposure to volatility in fact 46% of the surveys respondents have this as the main reason for them using a DCA strategy almost double the second highest response of encouraging consistent investment habits obviously this makes perfect sense crypto is a very volatile market after all so crypto investors will be

looking for a way to reduce those risks and what better way to avoid the impact of those massive red and green candles than by just ignoring them completely anyway jokes aside just 12% of respondents say they use DCA to remove emotion from Trading decisions and honestly we're a little surprised this wasn't higher that's simply because the stakes can be very high in crypto trying to time the perfect bottom to AP in praying the price goes up by 10x or 100x and then timing the perfect top to sell can be an emotional roller coaster especially with

the constant threat in the back of your mind that it could all go to zero in a heartbeat but then again I suppose that really depends on which cryptos you're aping into anyway 8% of respondents say that dcing makes investing easier for beginners which makes much more sense for two reasons first it's only really beginners that would have given that answer which cuts the audience rate down significantly second it's obviously true DCA really can make investing into crypto accessible for everyone even someone who's never bought a single crypto before and finally 6% said that they

use a DCA strategy because it lowers the average investment cost over time as we discussed now the next part of kraken's survey report suggests that investors on a lower income are more likely to react emotionally when it comes to crypto trading after all crypto is seen by many as a way to get ungodly gains that can't be found anywhere else however the risks that an investment could go down just as fast as it goes up can create a lot of mental pressure which is well known to cause investors to act irrationally leaving them wrecked in

the process in any case kren's learn team gives us a breakdown of investors with an income under $100,000 according to the survey the amount of investors using a DCA strategy depends on their income although there does seem to be a level of consistency but what's bizarre is that this section of the survey report doesn't give us a clear view of the bigger picture for instance we learn that 57% of investors earning under $10,000 will use a DCA strategy whereas 26% will try to time the market but what about the rest do these guys use a

different strategy well maybe they've stopped investing into crypto altogether heck what if they never did anyway audities aside the remaining brackets are as follows 30% of invest vors earning between $10,000 and $25,000 use a DCA strategy while 50% will time the market which suggests that more investors in this bracket would rather take a risk on approach although it's worth noting that this seems to be the anomaly across these responses meanwhile around 50% of crypto investors with an income between $25,000 and $50,000 will use DCA while 31% will time the market essentially a flip of the

previous response interestingly the exact same amount of investors earning between $50,000 and $75,000 would use either a DCA strategy or would try and time the market at 43% a piece and 55% of investors earning between $775,000 and $100,000 will use DCA while 31% prefer to time the market as for crypto investors with an income of more than $150,000 the scales are tipped much more in in favor of DCA 66% of people earning between $150,000 and $175,000 whereas just 14% try to time the market as for those with an income between $175,000 and $200,000 75% will

DCA and 20% will time the market and 77% of crypto investors fortunate enough to have an income over $200,000 will DCA while just 177% will time the market now this is a perfect reflection of the volatility benefits of using a DCA strategy obviously volatility presents risk and for those with deeper Pockets a drop of a few percentage points can mean a loss of thousands if not tens of thousands of dollars in fat terms remember it's not about how much you make it's about how much you keep next the survey report highlights that this balance is

reflected outside of crypto too and it also points out that younger investors are more likely to try and time the market with crypto than with other markets although it doesn't offer any data points for the latter this is a shame to be honest we would have loved to have seen how different demographics react to dcing now the survey then asked how investors rank their ability to stick to a trading plan throughout volatile periods it seems that the higher the income an investor has the more confident they are of staying on course more specifically 62% of

people with an income of over $100,000 say they have a very strong ability to stick to the plan whereas just 30% of people under $100,000 have the same Outlook this makes sense and it all comes down to one word Comfort an investor on a higher income is naturally going to be much more comfortable watching an investment go down than someone on a lower income who may feel pressured into making additional unplanned trades we've all got bills to pay after all what's intriguing is that the report then provides an infographic that shows how investors will typically

respond when faced with losses but the first thing it points out is that most crypto investors typically stick to their guns during a dip got to respect that anyway 61% of DCA investors will actually double down on their Investments meanwhile 27% of investors trying to time the market will simply stop trading and 31% of lump sum investors will carry on uh lump summing now the survey then asked investors how they typically respond to losses and although the report doesn't seem to go into much detail here the infographic provided reveals a clear Trend put simply the

deeper an Investor's pockets are the more likely they are to double down on their Investments when facing a loss in other words the Richer folk know to buy the dip meanwhile the less for fortunate Among Us are more likely to either make changes to their trading strategy or stop trading altogether anyway the report goes on to reveal that 73% of crypto investors keep an eye on market conditions more closely than traditional investors and we reckon this is the most relatable statement yet I mean come on be honest how many of you find yourself checking your

portfolio several times a day just know it's important to step away and touch grass sometimes now notably 66% % of people over the age of 45 will watch the markets more closely which is double the 33% of people aged 18 to 29 as oppose they're out there being young having fun and living their lives and finally the report also reveals that high earners will pay more attention to the crypto Market than other asset classes and that's most likely because the potential gains in crypto simply can't be found anywhere else so then that brings us to

the end of kraken's survey report as you can see DCA can be a powerful tool for crypto investors and is therefore very popular but by now you've probably asked yourself why you don't just ape in with a lump sum at the bottom and ride it all the way to the top well as we mentioned earlier this is much much easier said than done and the risk you take on can sometimes outweigh the rewards depending on the crypto in question as we also mentioned earlier a DCA strategy can give you a pretty similar outcome on average

without the need to panic every time the chart sees a big red candle now to illustrate why this is let's go over a few hypothetical examples to show you just how game-changing a DCA strategy could be for your own portfolio for this we'll be using a DCA simulator which is a free tool from into the Crypt Burse shout out to our good friend Benjamin Cowen and his incredible website anyways we'll use the 1st of January 2020 as a start date and we'll use the same start date for each crypto to keep things fair I should

also point out that these cryptos have been selected for illustrative purposes only so do keep that in mind now let's start with everybody's favorite crypto asset BTC if you'd invested just $10 a day from the 1st of January 2020 to the 1st of January 2024 you would have invested an impressive $4,620 by the 1st of January 2024 that investment would have been worth $3 $1,670 well over double your initial outlay that is not bad by any means but I think you'd agree that we can do better so let's take a look at another crypto shall

we why don't we look at tron's TRX so using the same $10 a day approach we already know that you would have invested $4,620 if you'd put that investment exclusively in TRX then by the 1st of January this year that TRX would have been worth $ 38,2 31 over $6,000 more than if you'd stuck to BTC but again I think we can do better so how about binance's BNB coin well if you'd invested just $10 a day between the start of 2020 and the start of this year your $4,620 investment would be worth an impressive

$ 72,3 15 almost 5x your initial invest M but what if you were feeling a little more degenerate and wanted to DCA into meme coins well it goes without saying that this is basically gambling and the success of different meme coins will be incredibly varied to say the least that said we can probably use Dogecoin as a proxy here seeing as it's the biggest meme coin out there by market cap so using the same $10 a day approach would mean that your $4,620 investment would be worth a joy or dropping $142,450 in other words a

10x return now 10x is fantastic but could we have done even better well what have we checked the price of the crypto that seems to have dominated this Market cycle that's right salana if you'd invested $10 a day into soul from the first of January 2020 to the 1st of January 2024 your $4,620 investment would be worth drum roll please $ 3,661 that's a 20x on your investment and would have given you a profit of over $285,000 big ones now obviously this means that the amount you can get back on your investment depends on the

cryptos you actually invested and it goes without saying that using the same investment strategy for other cryptos could have actually resulted in a loss not naming any names of course but as you can see from these examples a DCA strategy has the potential to be insanely profitable Heck if we refer back to BTC it's worth remembering that even a 2X is a damn good result where else can you double your money in four years not many places I would reckon but if you'd rather take a more Hands-On approach then there are a few variants of

the traditional DCA strategy that give you a few extra options at your disposal for instance there Dynamic DCA also known as value averaging where you adapt the amount you invest in each interval depending on market conditions so for example you might invest $1,000 a month during a bare Market but slow that down to maybe $100 in a bull market there's also a micro DCA strategy which is actually the type we used in our earlier example essentially this is just investing a small amount on a very regular basis like the $10 a day approach we used

typically a standard DCA approach would involve a higher investment amount on a less frequent basis for example $500 a month the important thing to remember is that there's no right or wrong answer here though DCA gives you the benefit of investing based on your own budget and risk tolerances so you can really be as flexible as you want to be all you need is the discipline to steer the course the best part is you can set it and forget it meaning you can completely avoid the charts that way you won't make additional trades that could

affect the end result and with a stressful environment like the crypto Market it's hard to think of a better way to invest of course though dcing isn't for everyone and thankfully we also have a guide on how to build your own trading strategy and we highly recommend you check that out after all you could always combine your trading strategies with a DCA approach if you really wanted to go all in now there's no denying that investing a lump some can give you a higher return and trading can be a great way to boost your gains

if done correctly that is thankfully we also have several videos on how to trade using technical analysis and we'll leave a link to those in the description too and if you'd rather keep up with the Traders on a more realtime basis then good news we recently revived the coin Bureau trading Channel which is now being led by Dan our very own head of research trust us when we say that when it comes to crypto there is nothing Dan doesn't know except nfts apparently so you can find a link to the coin Bureau trading channel in

the description so why not head over and be sure to hit that subscribe button while you're there and that's all for today's video folks but we want to hear from you now do you personally use a DCA strategy or are you more inclined to do so after watching this video let us know your thoughts in the comments below thank you all so much for watching and we will see you next time this is Guy signing off [Music]