Kraken Survey Shows Majority of Market Participants Using One Strategy To Invest in Crypto

A new survey from crypto exchange Kraken suggests that the majority of investors in the digital asset space are using the same strategy to gain exposure to the market.

Kraken’s survey reports that 59% of market participants are employing a dollar cost average (DCA) strategy to invest in crypto assets.

DCA refers to the practice of buying into the market on an ongoing basis regardless of price instead of attempting to time the market.

Says Kraken,

“Because it offers a ‘set it and forget it’ way to steadily accumulate crypto over time, dollar-cost averaging has also become a popular trading strategy for investors looking to reduce the impact of short-term price volatility and remove emotions that can cloud judgment.

Our survey found that a large majority (83.53%) of crypto investors have used dollar-cost averaging, and 59% of respondents use DCA as their primary crypto investment strategy.”

Survey respondents say that some of the most significant advantages of DCAing include hedging against market volatility, the removal of emotion from investing, and the tendency to encourage consistent investing habits.

Kraken also says that investors earning more than $100,000 per year are significantly more confident about their investment strategy and less likely to pivot than lower-income earners.

The survey adds that lower-income earners are more likely to try and time the market rather than employ a DCA routine.

“Our survey found that the more an investor earns, the more confident they are about sticking to their investment strategy. 62.89% of those with incomes over $100,000 say they have a ‘very strong’ ability to stick to a trading plan when facing market fluctuations, a major jump from the 30% earning less than $100,000 a year that rate their ability to stick to a plan as ‘very strong.’

Lower-income earners may face increased risk from trade losses because they assumedly have less cash reserves and disposable income. Even if markets turn against them for just a short-term period, lower-income crypto investors can be confronted with a difficult decision that forces them to exit their investment. In 2022, only 78% of people making $25,000-$49,999 expect to afford their monthly bills, compared to 94% of those earning over $100,000.”

 

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