Use the average cost of the dollar (DCA) strategy.
The average cost in dollars or in English Average cost in dollars is one of the simplest yet most powerful investment methods! It is even more effective when markets go down.
The average dollar cost is to divide your investment into small parts that it will be placed on a long-term basis over several months or years.
For example, you have 10,000 euros that you want to invest in Bitcoin. Instead of taking the risk of buying 10,000 euros in BTC at the worst time (in November 2021 for example), divide your 10,000 into 20 shares of 500 euros. Each part will be used to buy Bitcoin every month, for example.
Therefore, spread your investment over 20 months and you will have different purchase prices for each month.
DCA’s goal is to reduce the impact of volatility and the sudden drop in the markets.
The other benefit is that you buy more BTC when the markets go down and reduce your exposure when the Bitcoin price is too high.
For example, your 500 euros will allow you to buy more BTC when its price is $ 25,000 compared to when the price is $ 50,000.
Cryptocurrency exchanges don’t allow you to sell tokens without owning them first. The possibilities are therefore limited to take advantage of the decline in cryptocurrency markets.
However, derivatives are a solution. Most cryptocurrency brokers (among the largest) offer cryptocurrency futures. These futures allow you to have bearish exposure. You can sell the Bitcoin without buying coins in advance.
CFDs are even simpler. They are offered by online broker traditional. CFDs allow you to sell cryptocurrencies and take advantage of their decline.
Be vigilant and consult your financial advisor before making any investment decisions. Mirror-Mag cannot be held responsible in case of bad investments. Before using any third party service, you should do your research.