This is a thought leadership article written by Helen Liu. Helen is the Chief Operating Officer of Bybit.

In the fast-evolving world of crypto and web3, education and content creation are essential pillars for mainstream adoption. The industry was once dominated by niche communities, but today it reaches a global audience through influencers, key opinion leaders (KOLs) and content creators who simplify complex blockchain concepts.

As the Chief Operating Officer of Bybit, I’ve had the privilege of witnessing firsthand how education is shaping the future of web3. My career has been rooted in innovation, adaptability and global collaboration. At Bybit, our focus is on making crypto more accessible to everyone. We've seen how crucial education and outreach are in bringing crypto to the masses.

Crypto content creators and key opinion leaders (KOLs) play a crucial role in making blockchain technology accessible. They break down complex topics, such as 

 into digestible content that caters to both beginning and experienced users. In addition, by providing clear explanations and real-world applications they help onboard new users, while strengthening the knowledge base of the existing community.

Furthermore, these influencers exert a significant impact on public sentiment and market adoption. Their ability to amplify trends, introduce new narratives and engage audiences makes them powerful forces who shape investment decisions and industry trends. Whether they’re focusing on technical analysis or storytelling, they bring deep expertise and authoritative insights that bridge the gap between technical innovation and mainstream awareness.

Transparency is critical, especially when it comes to sponsored content and potential conflicts of interest. Misinformation can be costly in crypto, and it’s crucial for creators to disclose partnerships and provide accurate information in order to maintain credibility and build long-term trust.

While promotional content is a natural part of influencer marketing, educational accuracy must remain a priority. Audiences deserve well-researched, balanced perspectives, rather than exaggerated claims. Creators must fact-check information, source credible data and present content that genuinely helps users navigate the crypto space.

Today’s crypto education takes place across multiple platforms — YouTube, X (formerly Twitter), TikTok and dedicated learning resources such as 

. While high-quality educational content is readily available, the challenge is ensuring that newcomers can differentiate between well-researched information and misleading narratives driven by hype.

Crypto content exists on a broad spectrum. On one end, platforms such as Bybit Learn and reputable analysts offer in-depth, fact-based insights. In contrast, social media trends often fuel misinformation, leading to speculation and unrealistic expectations. 

Striking the right balance between engaging content and factual accuracy is key to fostering an informed community.

Why Bybit sponsored the Crypto Content Creator Campus (CCCC)

At Bybit, we believe that education is fundamental to driving blockchain adoption. That’s why we were the title sponsor of the inaugural 

, held in Dubai in November 2024. This event brought together over 200 global influencers with a collective reach of over 1 billion followers, reinforcing the importance of high-quality content creation in regard to crypto.

Empowering creators with tools and knowledge

During the event’s opening panel, our CEO, Ben Zhou, emphasized that creators are more than just marketers — they’re educators and storytellers. He highlighted the value of long-term community engagement over short-term promotions, stressing that authenticity and trust must be the foundation of crypto content. Zhou also recognized the power of microinfluencers, who connect deeply with niche audiences and drive meaningful engagement.

Through initiatives like CCCC, we at Bybit aim to empower content creators with the tools and knowledge they need to produce high-quality educational content. The event also showcased innovative projects, such as the CCCC Hacker House Challenge, which demonstrated how blockchain can revolutionize content creation. 

ur involvement in such initiatives reflects our broader commitment to supporting innovation, education and the growth of the crypto-creator economy. 

This year, the CCCC conference will be held in Lisbon, Portugal on Nov 14 to 16, and you can find out more 

Responsible content creation is key to crypto industry growth

As crypto adoption continues to grow, content creators, influencers and KOLs will play an even greater role in shaping public understanding and engagement. Ethical, transparent and well-researched content is essential to building a strong and informed global community.

At Bybit, we’re committed to championing education, innovation and responsible content creation. Through initiatives like the Crypto Content Creator Campus, we aim to equip creators with the resources they need to educate and inspire audiences worldwide.

A future where crypto is widely understood and responsibly promoted depends upon collective efforts from creators, platforms and industry leaders. By prioritizing education and accuracy over hype, we can ensure sustainable industry growth driven by informed participation instead of speculation.

Beginner

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Content creation and education in the crypto industry

A market correction is a decline in the price of an asset by more than 10%. Though the dip can be fairly small, it usually indicates that the crypto had rallied far from its established trend. Learn how to trade during the correction.

As we’re nearing the end of the first quarter of 2025, US president Donald Trump’s administration has been in charge of the world’s largest economy for only about two months. But in this short period of time, the 47th POTUS has already been making an outsized impact on financial and crypto markets — as the threat of tariffs with many of America’s trading partners, government sector layoffs and a new paradigm in the relationship between the US and European economies have sent investor sentiment into the territory of fear. Both stock market sentiment indices and the major Bitcoin 

 indices are hovering between the orange and red zones of fear.

As of the time of this writing on Mar 17, 2025, the stock market’s primary gauge — the S&P 500 index — has declined by around 8% since its recent peak on Feb 19, 2025, while 

 (BTC) is down by 23% since its all-time high on Jan 20, 2025, the day of Donald Trump’s inauguration.

As the crypto market declines, investors are becoming more unsettled, wondering if this drop represents another blip on the typically mercurial radar of Bitcoin or a prelude to a steeper downturn. Is this the market correcting itself after recent (possibly overly) optimistic gains, or are we witnessing the start of something scarier? In this atmosphere, it's important to distinguish between a market correction and a more profound decline known as a 

. In this article, we cover what a crypto market correction is, how it differs from a bear market and — more importantly — how you can prepare for it as a cryptocurrency investor.

A correction is a market decline that typically ranges from 10% to 20%. It signifies a relatively small but still noticeable drop in asset prices. The crypto market undergoes more frequent corrections than the stock market, due to its inherently 

. Over the past year alone (to mid-March 2025), Bitcoin’s price has experienced at least six corrections. In comparison, the stock market's primary index — the S&P 500 — hasn't experienced a correction within the past year. However, it's quickly approaching just that, with prevalently negative investor sentiment a 9% decline from recent peaks.

Is a market correction the start of a bear market?

A market correction — especially if it leads to a rapid decrease in asset prices — might seem worrying at first, but it’s part of the market's natural rhythm. In most cases, corrections end with a market rebound, i.e., a bull market, as asset price drops lead to increased interest to 

. However, if a correction is caused by significant underlying issues — such as price bubbles that have built up over long periods, or wider economic declines — it can be a precursor to a 

, which is characterized by a significant drop of over 20% in the market as asset prices decrease.

 interchangeably. However, others distinguish between the two concepts. According to some definitions, a market crash is a significant but short-lived decline of over 20%, while a bear market is a prolonged period of depressed asset prices that may last for months, or even years.

It's important to distinguish between a crypto market correction and a bear market, as the two require different strategies and approaches. Market corrections generally don't require the type of drastic measures from investors that bear markets do. As we’ve noted above, some analysts refer only to prolonged crashes as bear markets, while others use the terms “crash” and “bear market” interchangeably. If we assume the latter definition, then any market crash of over 20% — whether short- or long-term — can be described as a bear market.

Note that the definitions of a correction (10% to 20% decline) and bear market (over 20% decline) originated in traditional finance. These definitions have been used for the crypto market as well, but due to its higher volatility, the crypto market experiences corrections and bear markets considerably more often than the stock market does.

We noted earlier that the last time the stock market experienced a correction — as measured by the S&P 500 — was between July and October 2023, around one and a half years ago. Even then, the decline in the index was contained to 10%, just meeting the definition of a correction. In contrast, the crypto market has experienced numerous corrections (and three crashes) over the past year alone, to Mar 17, 2025. The image below shows these three crashes, which resulted in the decline of the 

 by around 22–23% each time. Additionally, we’ve annotated the ongoing correction that started to develop on Mar 2, 2025 — just days after the market rebounded from its last crash. This correction has so far (in ten days) resulted in a 12% decline in the total market cap.

Evidently, the crypto market is much more accustomed to corrections and bear markets than the stock market is.

How to prepare for a crypto market correction

Crypto corrections often arrive after periods of overly optimistic buying. They may also be caused by negative sentiment when crypto gets hammered — once again — by another influential regulatory authority. Investor sentiment may also turn negative and lead to a correction when traditional markets are trending downward. The last scenario is what we’re witnessing right now — the new Trump administration’s penchant for tariffs and drastic changes to budgetary spending has sent stocks downward, and the cryptocurrency market has duly followed suit.

When a correction is on the horizon, what can you do to best protect yourself? Below, we list several strategies that can limit the impact of a crypto correction on your investments.

Consider reducing your long positions when you sense early signals of a market decline. Some 

 or oscillators turning downward, can help you identify a market peak and an imminent downtrend.

 is a preset instruction to sell an asset once its price drops to a specific level. It’s one of the best trading strategies to limit potential losses during a market slump. Stop-loss orders have two primary benefits. First, they free you from the necessity to monitor prices and continually close your positions manually. Secondly, and importantly, these orders help avoid emotional decision-making during volatile downturns.

Placing stop-loss orders is just the tip of the iceberg when automating your trades. You can also devise considerably more sophisticated automated trading strategies by using 

. Bybit offers a variety of these bots to help you set key parameters for your trading strategy and execute it in a fully automated fashion.

 lets you automate your grid trading — a strategy whereby a set of orders is placed at several points above and below a certain reference price for an asset. The price points above the current asset price are designated as sell orders, while those below the current price are reserved to trigger buy orders. The corresponding sell or buy order is executed when the asset's price reaches a pre-specified point in the grid.

Another useful trading bot for your correction arsenal is the 

DCA is one of the most valuable trading strategies when expecting a correction or finding yourself in the midst of one. It involves splitting your total planned investment amount into equal chunks that are invested at predetermined time intervals, e.g., monthly, fortnightly, weekly or even daily. You make your regular fixed investments regardless of how the market moves.

As with automated trading strategies, DCA helps remove the emotional aspect from your investing. When you anticipate a market downturn, emotional factors can easily creep into your decision-making. DCA is one key way to prevent your emotions from affecting your trades.

DCA also reduces the impact of market volatility, since you’re spreading your purchases over time instead of buying at a single price point.

The Bybit DCA Bot we mentioned above isn’t the only way to automate your DCA strategy — there’s also the 

 product, which lets you set up your regular DCA investments in a few easy steps.

In the event that a correction continues to develop into a crash, the most crucial step is to avoid being influenced by emotions. If you find yourself amid a market crash, remember that all crashes, just like all corrections, are followed by market rebounds. The bottom of the market isn’t going to fall off — profit-seekers, both retail and institutional investors, will sooner or later move in to buy the dip. In fact, this could be an excellent opportunity for you to acquire assets with strong fundamentals, and at bargain prices.

Thus, stay calm, plan for the long term when prices inevitably recover, stick to strategies that eliminate emotional trading — such as automated methods and DCA — and perhaps even consider buying high-potential assets while they remain undervalued during the crash.

The concept of market corrections sounds unnerving. But unlike protracted bear markets, they’re typically short-lived and followed by price increases. The key steps to take in a correction are to avoid emotional decision-making, reduce exposure as much as possible, place some stop-loss orders and employ strategies like DCA and automated grid trading.

Notably, while stock market investors aren't accustomed to frequent corrections and crashes, the crypto market experiences them every year, multiple times. And yet, the multiyear, long-term established trend of the market has remained upward ever since the word “cryptocurrency” entered the financial vernacular. A stock market investor might feel intimidated by a correction — and even feel like fainting at the thought of a crash — but a savvy crypto investor knows that corrections and crashes are business as usual. As such, be prepared, but don’t panic. We’ve been through crypto market crashes more often than Bitcoin has been declared dead.

crypto market correction.png

Crypto market correction: What it means and how to prepare

Ethena Labs and Securitize have launched Converge, a settlement network designed to bridge traditional finance (TradFi) and DeFi.

Daily top performer — PancakeSwap (CAKE)

The S&P 500 gained 0.64% as softer retail sales fueled Fed rate cut speculation. Investors await Wednesday’s Fed decision. Gold hit a record $3,005 as geopolitical tensions and trade concerns fueled safe-haven demand, with strong support from central bank and ETF purchases. Markets await the Fed’s policy decision. The Coindesk Indices, which tracks the broader crypto market, fell by 0.60%, with Bitcoin and Ether up by 1.66% and 2.12% in the past 24 hours. Trade these markets and more with up to 500x leverage on Bybit MT5 using this 

Today’s top performer is CAKE, up 27.9% after PancakeSwap MEV Guard extends wallet support for improved trade security.

PancakeSwap (CAKE), launched in September 2020, is a BNB Chain-based DEX for BEP-20 token swaps, offering lower fees and faster transactions than Ethereum-based rivals. 

 now supports more wallets on BNB Chain, including Trust Wallet and Rabby Wallet, enhancing protection against frontrunning and sandwich attacks. Users can enable MEV protection with a simple one-click setup for most wallets, ensuring safer and more reliable trading.

Check out the latest prices, charts, and data of 

Ethena Labs and Securitize have launched 

, a settlement network designed to bridge traditional finance (TradFi) and DeFi. The platform will integrate Ethena’s USDe, USDtb, and iUSDe stablecoins with Securitize’s tokenized assets, facilitating institutional on-chain participation. Converge will feature both permissioned and permissionless financial applications, supporting lending, trading, and structured products. Five protocols, including Aave Labs and Pendle, have committed to building on the network. Mainnet is set to launch in Q2 2025.

Yesterday, BTC spot ETFs saw $232.3 million in net inflows, driven entirely by non-GBTC funds, while GBTC recorded no flow.

, allowing users to complete tasks and earn points for future rewards. Existing users from the old platform receive a 1,500-point bonus. To join, create an account, fill in profile details, and complete quests requiring X, Discord, and MetaMask connections. Daily check-ins also grant rewards, with more quests coming soon.

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Ethena and Securitize launch Converge to bridge TradFi and DeFi

Bubblemaps is a data visualization tool for blockchains. It uses colorful maps of circles to show important details. Learn more about how it works here.

 prior to their purchases. There's a lot of valuable information available for cryptocurrencies, but accessing and understanding it takes time. Bubblemaps offers a revolutionary solution: a 

 visualization tool that makes it much easier for users to see how blockchains operate behind the scenes. Should you try working with Bubblemaps? To see if it's right for you, here's what you need to know. 

 is a data visualization tool for blockchains. It uses colorful maps of circles to show important details, such as token distribution and disproportionate 

 token ownership — thus making it easier for investors to identify both trading opportunities and scams.

 in 2022. Before he worked on Bubblemaps, Vaiman was the CEO of a cryptocurrency investment company called Cryptonavia. During his work there, Vaiman noticed how difficult it was for investors to get a clear idea of how projects were run. Though there was often plenty of data revealing warning signs behind a project, it was hard to access and process this data. 

Vaiman was inspired to create a website where people could get useful information quickly. His vision has appealed to many investors, and Bubblemaps currently has over $3.2 million in funding from investors like Sierranova Capital, ChainGPT Labs and Arcanum Ventures.

Bubblemaps’ main purpose is to make cryptocurrency data more accessible. Traditional blockchain explorers often provide strings of data that aren't particularly intuitive. Meanwhile, the Bubblemaps site not only acquires data for you, but also uses its mapping system to make issues far more obvious. With “bubbles” that highlight info, such as linked wallets, the system hopes it can allow everyday investors to make more informed choices.

Bubblemaps also aims to become a watchdog for 

 and market manipulation. It regularly uses its tools to identify problematic projects and to draw attention to them. While users can analyze their own investments with Bubblemaps, the project also hopes to help people who don't work with the project’s software. The site's blog and social media feeds try to warn users of potential fraudulent activities involving trending cryptos whenever they can.

Bubblemaps primarily functions as a collection of software and coding. Unlike some other ecosystems, it doesn't have many blockchain functionalities embedded into its system. Instead, it operates similarly to standard Web 2.0 websites. Its creators designed code that scrolls through data about blockchain wallets and addresses, and then uses additional coding and display tools to sort and organize this data into easily readable Bubblemaps.

The Bubblemaps application can be accessed directly from the company's main website. Its system also allows other sites to integrate Bubblemaps as a 

 screener. With just a few lines of code, Bubblemaps analytics are natively integrated into other 

The Bubblemaps system contains a variety of features meant to improve blockchain data accessibility. The following are some of the ways users can enjoy Bubblemaps services.

This is the main feature of the website. Its users can search for tokens and click on a token to see its map. This visual representation of data looks like a series of circles and lines. The circles represent wallets holding significant portions of a token's total supply: the larger the circle, the more tokens the wallet holds. Lines drawn between wallets represent transfers, and highlight interconnected addresses. Clicking on the circles highlights the wallet's owner, and depending upon their privacy settings, you may even be able to see which individual or organization holds the tokens. 

Intel Desk is a community-driven feature for investigation. Users vote on which tokens need to be more closely examined. Winning tokens are carefully examined by Bubblemaps’ scam-detection squad, and users are told if any fraudulent activities have been found among a token's interconnected addresses and wallet holders.

The Time Travel feature lets users look at the past activity of multiple blockchains. You can see how maps shift over time, in order to get an idea of what's happening on blockchains throughout a coin's entire lifespan.

Magic Nodes is an advanced feature that shows interconnected addresses. Instead of just looking at wallet owner labels, Magic Nodes looks at how the crypto is actually moving around. For example, it can identify multiple holders who are all paying their gas fees from one address, so that users can see when an entity is using intermediaries to manipulate the market.

Bubblemaps has already managed to achieve a lot. In addition to designing its visual interpretation of blockchain data, the site has also natively integrated with various partners on other DeFi platforms. 

. In addition to the release of the token, the system also plans to add multiple features linked to the token, including upgrades to cross-chain analytics, AI cluster interpretation and P&L computation. 

For the future, Bubblemaps hopes to expand further into the crypto space. By adding multiple blockchains to its app and integrating with more systems, Bubblemaps aims to become the premier crypto and DEX screener. 

The BMT token helps power Bubblemaps’ Intel Desk feature. Holders of BMT vote for the cryptos they’d like Bubblemaps to investigate. BMT is also used as the reward method for those whose proposals are chosen for Intel Desk.

Residing on both Solana and BNB Chain, BMT has a total token supply of 1 billion tokens. Of these, 27% were available at launch. The rest will be unlocked on a 

Though BMT was only released in March 2025, it's already experienced some wild price swings. The token debuted at around $0.16, but prices quickly dropped to $0.07. Currently, BMT’s price is stable in the $0.08–$0.10 range.Bankless Times 

 will help keep its price up, predicting that BMT might reach $0.30 by 2025. DigitalCoinPrice is slightly more cautious, but agrees that some sort of price rise is likely. Taking into account current market growth,DigitalCoinPrice 

Looking to trade Bubblemaps tokens? Bybit now offers the BMT/USDT Spot trading pair and BMTUSDT Perpetual contract. To get started, you’ll first need to create a Bybit account, then fund it with cryptocurrency and navigate to the 

To celebrate this listing, Bybit is holding 

 where you can earn a share of a 2,000,000 BMT prize pool. 

BMT was hotly anticipated leading up to its release. The Bubblemaps tool is a favorite of crypto investors, and many people are interested in supporting the new project. Furthermore, the coin's link to the Intel Desk feature could help stabilize its price and create demand.

However, keep in mind that there’s been some criticism of BMT. Using the Bubblemaps tool on the system's own coin reveals that an outsized portion of the total supply is held by a single wallet. This has led to some 

, and the token’s price has stayed fairly low since this issue arose. While it's possible there's a good explanation for this distribution pattern, a lack of user trust could still cause problems for the new token. 

Therefore, investors who are interested in working with BMT token holdings need to maintain some caution. Furthermore, the crypto market always exhibits some volatility, so be sure to take that into account. As always, 

 — and avoid putting all of your funds into a single coin.

Using the Bubblemaps tool is a simple and great way to visualize the data from traditional blockchain explorers — making it quick and easy to spot potential problems with token holdings and distributions. Now that Bubblemaps is moving to the next level of its road map, fans also have the opportunity to buy and sell BMT tokens. Thanks to the hype around the platform, even investors who don’t use Bubblemaps may want to explore BMT.

Intermediate

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Bubblemaps (BMT): Bursting crypto's complexity bubble

Crypto

Dollar cost averaging is a popular investment strategy in crypto, but how do you do it? Read this article to find out.

The cryptocurrency market has seen some dramatic peaks and troughs in the last few years. Many people rushed to invest in 

 (BTC) and other cryptocurrencies during the 

 of 2017, and consequently lost considerable amounts of money in the subsequent 

, simply due to the lack of an efficient investing strategy. 

If you are a newbie in the world of crypto, it may seem a challenge to find a strategy that would guarantee success. Indeed, no strategy can guarantee success. However, there is an option that can minimize the risks and bring you steady profits from the long-term perspective.

This article aims to uncover the strategy known as dollar-cost averaging and give some tips on how it can be implemented.

Dollar-cost averaging, or DCA for short, is an investing technique that helps to invest a certain amount of money in small increments at regularly scheduled intervals. The strategy uses changes in the market price over long periods.

The choice of the right moment is the most challenging task for beginning traders and investors. The variety of trading signals is so extensive that, at times, it may be tough to choose when to invest. Even experienced traders often make mistakes when reading the market. DCA helps to mitigate the risks.

As DCA involves the regular purchase of a particular asset for a fixed dollar value, its key goal is to decrease the impact of the volatile market, which is a key challenge for crypto investors. This method helps to smooth out the average price when you make a purchase, instead of making a lump sum investment.

DCA is nothing new, and has been popular among institutional investors long before cryptocurrencies were invented. This strategy has been endorsed by none other than Warren Buffett, CEO of Berkshire Hathaway, who has recommended it to those who can’t spend much time on investigating the market and developing their own trading strategies.

Though no strategy can mitigate risk entirely, DCA is still able to reduce it to some extent. Keep in mind that the strategy alone can’t provide a successful investment, as there are many other factors to be considered.

To apply the DCA strategy, an investor should first decide upon the amount to invest and the targeted asset. Since we are talking about cryptocurrency investments, it may be Bitcoin or any other 

. Having specified the target price, he/she should divide the investment sum into equal parts and sell them regularly when the market approaches the defined level.

The DCA trades can be handled manually or with the help of certain automation tools. For instance, dollar-cost averaging bots working with cryptocurrency exchanges can significantly simplify the process, as they help investors automate the operations. Such bots perform automatic purchases without considering the market conditions, such as the market movement or the price of the asset. The process is automated in a set-and-forget manner. 

Sticking to a DCA strategy helps to flatten average purchase price and reduce the impact of inefficient decisions. For instance, you may have purchased an asset when its price was skyrocketing. Later, when it pulls back, you may buy more cryptocurrency at a lower price during the market sell-off period, while other market participants sell a huge volume of assets within a short time. Buying when the market is down creates the possibility of smoothing the average price and deriving profit from the investment, something that will hopefully grow in value in time. 

The results can be different when disparate assets are employed. The service 

with the help of a Bitcoin investment calculator, helps investors to explore different parameters so that they can see their performance when using DCA. The visual graphics help to see if DCA is the right strategy for investments. 

To evaluate the efficiency of your investment, specify the start day, the amount invested, and the interval of repeat purchases. The tool facilitates the purchases on a recurring basis within the specified period. The calculator uses the historical price of Bitcoin to calculate the profit of a user. The calculator’s default parameters show the profit when you — for example — have invested $10 in Bitcoin every week for the past three years.

Using this example, the investor would have spent $1,570 on BTC. This amount would have turned into $11,782 (+650%) at the time of writing. The chart doesn’t only calculate the amount of profit but also compares the efficiency of the strategy applied to other assets. For instance, the same strategy wouldn’t work so well with gold. It would have returned only +16%.

Dollar-Cost Averaging vs. Other Investment Options

In accordance with historical records, the financial markets tend to grow over time, which explains the advantages of dollar-cost averaging. This investment method differs from other methods, as it doesn’t require investors to guess when market prices will be low in order to invest at the right time. Instead, averaging the dollar’s value ensures that investors buy at regular intervals, and can take advantage of market downturns by automatically buying more assets for the same amount of money. Averaging the value of the dollar removes some of the guesswork from an investment and turns it into a more predictable routine.

Investors can also select a “buy and hold” strategy, not intending to sell the assets predicting the growth of their value. The goal of this strategy is to enter the market and remain there, despite all fluctuations. Timing the market is not an essential factor when this strategy is employed. 

Although the holding strategy seems to be easier, DCA can be a more effective option. In the end, an investor following the DCA strategy, buying at regular intervals, can end up having more Bitcoin than someone who invested the same amount in one lump sum. Both started investing simultaneously but employed different strategies.

Many investment companies offer solutions to facilitate the usage of the DCA strategy. They often allow investors to create automatic investment plans in which investors can specify the dollar amount and frequency of investment, and a bank account for automatic withdrawals of funds. Thus, the averaging of the dollar value is done automatically, ensuring that the investor doesn’t forget to make the planned purchase. It also helps make budget planning easier, as the same dollar amount is purchased at regular intervals.

The DCA strategy is one of the best options for markets with a high level of volatility. The strategy was designed to cater to an investor’s needs in such markets, mitigating the risks of buying assets when their prices are soaring. The concept of splitting a large investment amount into multiple smaller purchases is appreciated by investors who can’t afford to make investments in a lump sum. 

However, critics argue that the use of this strategy brings losses when the market performs well. For instance, when the market is in a bull trend,  traders who invest earlier reap bigger profits. So the strategy has its pros and cons, which we cover fully below. 

The benefits of using the DCA strategy include:

An investor doesn’t have to invest a considerable amount, in one lump sum, immediately. Consequently, this strategy reduces the risk of investing at the top price. It also reduces the burden of trying to time the market. In a volatile cryptocurrency market, the asset’s value can fall many times within a relatively short period. 

As we know, the crypto markets can be very hard to predict. As a result, even highly experienced traders encounter problems when predicting the movement of selected assets or even the whole market. Those who are new to the entire world of investing and trading often lose considerable sums of money because they don’t have a strategy in place. With this in mind, the DCA approach is a much safer investment strategy, as it helps to offset large market dips and works for investors with any level of expertise.

The possibility of investing small amounts

The DCA strategy is suitable for a broader range of investors, since a sizable up-front investment isn’t required immediately. This makes it affordable to those who can’t fork out a massive amount of capital at once. Also, as investors can have doubts concerning an asset and feel uncomfortable investing their savings in it, it becomes psychologically easier for them to invest small chunks from paychecks regularly. 

Those who seek quick profits may quit and stop investing, getting angry when the price of an asset drops. It’s important to understand that DCA is not a scheme for getting rich fast. This strategy is long-term, as its goal implies taking advantage of market downturns without risking capital. Beginning investors can be easily discouraged by negative episodes. Therefore, the DCA strategy can be an excellent solution for them. It gives them time to do deeper research, while investing small chunks of a fixed amount.

The opportunity to buy assets with a discount

When you don’t invest the whole sum that you have at hand, you may have some cash left over that you can use to buy more cryptocurrencies at dips. For instance, in November 2018, Bitcoin collapsed to $3,500  after it had been traded at $6,500 for several months in a row. Such periods can be used as an opportunity to dollar-cost average. Taking into account a parabolic rally soon after the price crash, the followers of the DCA strategy could take great advantage of it — especially when the price skyrocketed to $14,000  three months after the crash.

This aspect is sometimes neglected, though it is incredibly important for the mental health of market participants. Those who use the DCA strategy don’t worry so much about the price swings, which helps to avoid constant anxiety. 

The drawbacks of dollar-cost averaging are as follows:

Traders have to pay fees for making transactions. Following a DCA strategy usually incurs more trading costs. However, taking into account the fact that this is a long-term strategy, the gains received from it should more than cover the fees, which will hopefully be insignificant compared to gains achieved in the future. 

One of the drawbacks of the DCA strategy is the possibility of missing out on a considerable gain you could have obtained from investment of a large sum in one go. However, it’s necessary to use the right timing for such operations if you want to see a significant profit from an investment.

Much time is required to make the strategy work. Depending on the investor’s DCA structure, it can take from three to twelve months to get any sustainable results.

Worse performance in a strong bull market

The choice of the strategy depends upon the situation in the market. The DCA strategy may not always be the best choice. For example, it may result in losses at the beginning of the long-term bear market that may last for a few years. It may be better to invest a significant sum in cryptocurrencies if you are sure that Bitcoin is at the beginning of a bull cycle.

The DCA strategy is a good choice for less-experienced investors, who are guided by emotions and thus may be prone to making incorrect choices. If you seek long-term profits and are ready to wait for a substantial period before your investments pay off, this strategy is exactly the fit for you.

Explained: What Is Dollar-Cost Averaging?

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