What is Dollar-Cost-Averaging? - Episode 347 - by cryptohunt.it

What is Dollar-Cost-Averaging?

Welcome to the Cryptohunt Jam, where you learn – in just a minute or two a day – what is happening in crypto and other game-changing ideas. As always: In plain English.

Today, let’s talk about Dollar-Cost-Averaging, a popular passive investment strategy often used to build a crypto portfolio.

Have you ever heard the saying 'buy low and sell high'? Well, the problem is that timing lows and highs is very hard - if it wasn’t, we would have all bought Bitcoin in 2010. But Dollar-Cost-Averaging can help avoid buying at the worst time.

Before we dig in here, just a word of caution: This is not investment advice. We are simply here to explain interesting concepts - what you do with those is at your own discretion.

With that, let’s get to learning: We’ve all seen egg prices make crazy swings in the last few weeks. Imagine you're at the grocery store and want to buy eggs. You are thinking: “Should I buy a ton of them now and hope prices don’t go down? Or should I wait for a dip?”

But instead of doing any of that, you decide to simply spread the purchases out in even amounts over time. One pack of eggs every week. That way, you protect yourself from accidentally buying a ton of eggs when their price is at the peak. And while it would have been best to buy them at their lowest, the thing is this: you just never really know when or if that comes around.

Dollar Cost Averaging in investing is the same. Instead of trying to time the market and buying all of your investments at once, you spread out your purchases over time. By using Dollar Cost Averaging, you're taking a disciplined approach to investing and reducing the risk of buying in at a high point in the market. It can also help you avoid the emotionas of trying to time the market, which can be frustrating, because it’s so hard to do.

And that's why many crypto investors use Dollar-Cost-Averaging - they are trickling their money into the market over time, under the assumption that it will go up over a longer period of time, without having to bet on exact timing.

Todays episode is sponsored by the Cask Protokol, and they are experts in Dollar-Cost-Averaging - or in short: DCAing. Cask is application that helps you to automate crypto transactions and keep those in your own wallet. If you want to learn more about DCAing or Cask - we will release a fresh new course on the topic tomorrow on Cryptohunt.it - just look out for the new course email. Or just check out www.Cask.Fi.

This podcast is produced by Cryptohunt.it, the easiest place to learn all about Web3.

Copywriting is done by Arndt Voges, Social Media is done by Brett Holleman, design is done by Carmen Rincon, and my name is Christian Byza, Co-Founder of Cryptohunt and I am your host of this daily show.