Most crypto investors use dollar-cost averaging, Kraken survey shows

The crypto landscape is known to hold incredible potential but also serious risks. Given this reality, the importance of having an investment strategy when moving through the space cannot be understated. After all, virtually no one hops into the field with defeat in mind. 

While there are several ways to invest in crypto, one well-known method is dollar-cost averaging (DCA). This popular strategy involves regularly buying an asset at a fixed amount and at regular intervals, allowing investors to build up holdings steadily over time and with practice.

According to Forbes, investors who follow the DCA strategy purchase assets— regardless of price—in smaller quantities at regular intervals. With DCA, investors accumulate holdings over time rather than going all-in with a single lump sum. 

The investment strategy has risen in popularity, as it is thought to help deal with the effects of price volatility in the short term. As it sets investment practice on autopilot, DCA may also help investors avoid making decisions driven by greed, fear, FOMO, and other emotional states that can cloud judgment. 

In a new survey conducted by Kraken—a top centralized crypto exchange—DCA was a highlighted focus. According to the survey, the majority of crypto investors turn to DCA as their main strategy, revealing growing trust in the method.  

As part of the survey, Kraken asked 1,109 crypto investors to learn more about how they handle market fluctuations. It also wanted to see if these investors could effectively use DCA to avoid emotional decision-making.

Kraken found that up to 83.53% of investors have tried dollar-cost averaging. Going further, it also discovered that 59% of these respondents use DCA as their main investing method. 

KRAKEN SURVEY UNPACKS CRYPTO INVESTOR VIBES: DCA DOMINATES!

Kraken's recent survey reveals that 83.5% of crypto investors are all about dollar-cost averaging (DCA), with 59% using it as their main strategy.

DCA, buying crypto at regular intervals, helps dodge wild price swings… pic.twitter.com/qHxxdvO8rv

— IBC Group Official (@ibcgroupio) October 9, 2024

Notably, several crypto investors think that DCA is important. In fact, 46.13% of survey respondents agree that DCA's help in dealing with market volatility is its biggest advantage. The second top benefit is its support for consistent habits of investing. 

Only a comparative few (12%) agree that DCA's most significant advantage is that it helps combat emotional decision-making. 

Kraken took its survey deeper by factoring in age and income levels. 

Among younger investors (18 to 29 years old), 22.77% agree that DCA's most significant advantage was removing emotion from trading.

The survey also particularly observed that 50% of investors from this age range favor timing the market over sticking to DCA—showing that crypto investors on the younger side of the spectrum are more open to taking risks.

Kraken also revealed that among individuals who earn $175,000 to $199,000, up to 66.96% think that DCA's biggest benefit is reducing market volatility.

Delving deeper into how income is linked with investment strategy, the survey discovered that investors who earn less than $100,000 are more likely to engage in riskier methods, such as market timing.

These lower-income investors are also more likely to react to market volatility by modifying their approach compared to investors with higher incomes.

As for those who earn more than $100,000, they appeared to be more confident in how they invest. In fact, Kraken reported an observed relationship between earnings and confidence: the higher their earnings, the more confident they are to stick to their selected strategies. 

Among investors who earn more than $100,000, up to 62.89% reported having a “very strong” capacity to follow their trading plan during market swings. This figure is quite notable, compared to the 30% of individuals who earn less than $100,000.  

Notably, crypto investors with earnings that exceed $150,000 prefer to adopt DCA. Going deeper, 75% of investors who earn $175,000 to $200,000 were DCA followers. This figure was slightly higher (77.70%) for individuals who earn more than $200,000. 

While DCA is not a perfect strategy, the recent survey shows that most crypto investors are convinced of its advantages—enough to lean on it as their primary method.

Like every other investment method, DCA is not a guaranteed ticket to profit. Nevertheless, it is considered viable for building up crypto assets in the long run—all while mitigating risks and maximizing returns.