An Automated & Disciplined Dollar-Cost Averaging Strategy

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11 Jun 2024

To Each His Own
Some investors enjoy selecting and purchasing their Crypto assets every month. Then some would prefer to have someone else handling it for them. Hence, the rise of the fund manager. Some enjoy the ins and outs of Crypto, while others are only pleased by figures on a screen. A lot comes down to the individual’s temperament, and one should not be demonized regardless of which side of the fence they are on.
Crypto investments are different from TradFi investments. The average Crypto investor is a lot more Crypto savvy than the average TradFi fund manager, and so is better equipped to make good investment decisions. This is not an absolute, but rather a general aggregate regarding Crypto enthusiasts, and most definitely does not include newcomers. Regardless of natural abilities and talents, any investor must first be informed.
After calling the Bitcoin bottom for September 2022, I suggested ongoing accumulation. Investors should have ideally been dollar-cost averaging into the market since the final quarter of 2022. This would have been the ideal approach. This is not merely the position of hindsight, but a reminder of what was declared and published during the final quarter of 2022.
An Invitation From Altcoins
Now, for those who missed out, or chose not to DCA during this period. Should you now initiate a dollar-cost averaging strategy? The short answer is yes. Despite seeing some nice price action regarding Bitcoin, memecoins, and a handful of alts. For the most part, altcoins are yet to rally. Look at any altcoin, most of them are far from their previous ATH levels.
Regarding blue chips, only Solana and Ethereum have experienced any meaningful progress regarding their ATH levels. Then there is BNB which has surpassed its previous ATH along with Bitcoin. This was another chain/project that many were calling for the demise of not so long ago. However, it has not only survived but thrived. Historically, the market could take off at any moment.
We are now a few months past the halving and continue to “hammer” around Bitcoin’s previous ATH at $69K. This is classic behavior for this period of the cycle. As always, some are becoming nervous, and even fearful. However, all appears to be going according to plan so far. If this is the case then continued accumulation is warranted. It might not be as beneficial as in 2022 or 2023. However, It’s still a profitable approach.
One of the ways investors can accommodate such a strategy is to set a recurring purchase on an exchange such as Luno. One of the additional benefits of utilizing Luno is that investors can construct their own type of Crypto index. In other words, they can create a basket purchase that distributes capital among several Crypto assets. In this way, a single purchase can gain exposure to multiple assets.
New Luno users can use the following code: XEV6Z to receive ZAR 200 in free Bitcoin, provided they conduct a swap to the value of ZAR 500 or more. The dollar valuation of ZAR 200 is approximately $10.
This is an idea for busy or less experienced investors. It’s a great way to gain continuous exposure while reducing friction. Being able to purchase “Bundles” is also a perk that some may enjoy. However, these are generally blue chip projects, suited to particular investors. Investors like myself prefer a higher risk/reward ratio. Such investors seek out their own investment opportunities.

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Final Thoughts
Automating your dollar-cost averaging strategy is a great way to ensure you actually stick to it. Many are disciplined, to begin with, but within a couple of months fade away due to various reasons. However, having a recurring investment helps to keep the ball in motion. Regardless of your approach, ongoing accumulation is a good idea. This is my opinion. Anyway, I will catch you next time. Keep stacking!

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Disclaimer
First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.
This article was first published on Sapphire Crypto.