Account Info
Log Out
English
Back
Log in to access Online Inquiry
Back to the Top

Be Careful - DCA is NOT a Sound Strategy In Most Crypto Cases

I routinely see people talking about how DCA is the "right way" and is the core strategy everyone should be using. Having been an investor (and no, not just in crypto), and worked in finance for ~10 years, I hope the following can be of use to the new people in crypto:
1.DCA *is a good strategy* typically only for broad, diversified, passive investments. For example, in a Total Market Index instrument, or a gov bond package etc.
2.DCA *can be a good strategy* for assets with strong fundamentals. You could theoretically make this case for BTC and ETH (and even that's a stretch). But vast majority of crypto projects do not fall in this category.
3.DCA is *not a good strategy* for any assets that are highly volatile and you are expecting a big price pump on to realize your target gains. This is where vast majority of crypto projects (and crypto investors) fit in. It doesn't matter how much you DCA projects that have a real risk of going to zero, you are essentially throwing good money after the bad.
4.DCA is a recommended strategy for dividend bearing investments (where you are getting a solid APY that offsets opportunity cost etc). This allows you to over time build up a strong yield cashflow independent of market fluctuations. $Bitcoin (BTC.CC)$ $Ethereum (ETH.CC)$ $Dogecoin (DOGE.CC)$ $Coinbase (COIN.US)$ $Robinhood (HOOD.US)$ $ARK Innovation ETF (ARKK.US)$
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only. Read more
1
1
9
+0
7
Translate
Report
95K Views
Comment
Sign in to post a comment