HOME CATEGORIES WRITE AND EARN 🔍
CATEGORIES WRITE AND EARN MORE

CRYPTO NEWS

Your favorite crypto news blog

Dollar Cost Average: Even Bitcoin Investors Using This Strategy May Soon Be At A Loss

Bitcoin 2019/11/25 20:00 by Tony Spilotro

There are a number of sound investment strategies a crypto investor may choose to gain exposure to Bitcoin and other cryptocurrencies, depending on important factors such as risk appetite or income level.

Those who jump into Bitcoin investing without a plan can result in significant losses. However, one of even the slowest, and safest methods of accumulating Bitcoin could soon leave investors at a loss if the first-ever cryptocurrency’s price falls any further.

Even Dollar Cost Averaging Bitcoin in 2019 Could Lead to Losses

For anyone considering investing in Bitcoin and other cryptocurrencies, among the first pieces of advice often given to those interested in entering the space, is to never invest more than you can comfortably afford to lose.

Related Reading | Legendary Bitcoin Short Seller Says To Watch For Base To Form Before Buying

The advice is given for a number of reasons, including the fact that cryptocurrencies are like catnip for cybercriminals, or more commonly, the volatility associated with cryptocurrencies could result in a complete loss of one’s initial investment.

Those that bought into Bitcoin without an investment strategy at the height of the crypto hype bubble were stuck FOMOing into $20,000 BTC and have been holding the asset at a loss for nearly two years at this point if they haven’t already sold at a loss.

Oftentimes, for newer investors who don’t have experience with market cycles, technical analysis, or fundamental factors, should consider a more patient approach to investing called “dollar-cost averaging.”

The practice of dollar-cost averaging consists of making a set, regular investment in an asset at regularly scheduled intervals. This way, as the asset’s price rises and falls through natural market movements, the investor is always steadily buying the asset, and the actual buy-in price at that time becomes less relevant, and only factors into the average buy-in cost.

However, even crypto investors who have invested one dollar daily into Bitcoin over the last year may soon be at a loss if the first-ever cryptocurrency drops further in value.

Dating back one year ago, investors would be buying up Bitcoin at lower than current prices, making their initial average buy-in price somewhere between $3,000 and $6,000. But after the April 2019 rally, Bitcoin price broke up above $6,000 and reached prices as high as $14,000.

Related Reading | Crypto Market Fear Index Suggests Bitcoin Price Has Further To Fall

The crypto asset traded much of the second half of the year above $10,000 causing the daily buy-in average price to rise over time. And now that Bitcoin is falling back down towards $6,000, anyone who dollar cost averaged into the crypto asset could soon be left with a loss – even despite using what most consider to be the safest and most effective investment strategy possible.

Featured image from Shutterstock

The post Dollar Cost Average: Even Bitcoin Investors Using This Strategy May Soon Be At A Loss appeared first on NewsBTC.

0 Like(s)



You should also read...

Crypto 14/10/20 18:01 by Brenda Ngari
Russia’s Central Bank Wants To Limit The Amount Of Crypto Unqualified Investors Can Buy Annually
Russia has been at different times hostile, unsure, or inconsistent with its stance on cryptocurrencies. In early August, reports claimed that Russian leader Vladimir Putin had signed a law that lega...
Read More
Bitcoin 29/01/21 02:00 by Tony Spilotro
Robinhood Reminder: Not Your Keys, Not Your Bitcoin
Today’s biggest news isn’t about Bitcoin, but because the cryptocurrency and others trade on the platform at the center of the scandal, it is a wake up call for investors. Robinhood today ...
Read More
Crypto 17/03/21 12:21 by Adrian Klent
Binance CEO Backs Indians in their Quest to Revive Crypto Usage in the Country
The founder of leading cryptocurrency exchange Binance has spoken against the cryptocurrency ban soon to be enforced by the Indian government. While speaking to a local news outlet, Changpeng Zhao ex...
Read More
Bitcoin 22/03/21 18:30 by Mark Hampton
Is it Too Late to Invest in Bitcoin?
The rollercoaster of cryptocurrency prices started off on a wild ride in 2021, exceeding records previously set and abating the significant losses crypto investors had to endure ever since 2017. After...
Read More
Crypto 24/05/21 11:46 by NewsBTC
TRGC Opens Up Earlystage Blockchain Growth Opportunities for Global Investors to Leverage
Founded in 2018, TRGC functions as a digital asset fund focused on backing visionary teams and companies that work for a better global financial system leveraging the growth potential of emerging tech...
Read More