Cryptocurrency Dollar-Cost Averaging Plan#
About the Dollar-Cost Averaging Plan#
In 2021, I started my own dollar-cost averaging plan based on Zhu Anbang's plan. Before that, I had always been concerned about the issue of capital input, only mining, and had never made serious investments or had any trading methods. During the bull market in 2020, I didn't make much money, and in the latter half of the bull market, I lost quite a bit due to reckless operations. After seeing Anbang's post, I considered following his dollar-cost averaging method.
Dollar-Cost Averaging Approach#
Referring to Zhu Anbang's article “Buy and Hold for Thirty Years”, his website has detailed daily dollar-cost averaging returns and market data, which you can refer to if interested.
In his dollar-cost averaging strategy, he had the idea of investing in the top 100 coins by market capitalization multiple times. Although my investment amount is not as large as his, I have also invested in many of the same coins. The actual result is that many have shrunk to 10% or even gone to zero. He himself has stated that this should not be done; dollar-cost averaging should still choose large-cap coins that have been around for a long time and have high consensus.
Due to my limited funds, I also referred to Ahr999's coin index and sentiment index. When BTC hit $60,000 twice, if I had followed the extreme greed shown by the sentiment index and sold based on my intuition, I wouldn't have regretted it, even if the amount was small.
Dollar-Cost Averaging Method#
After the FTX incident, I recommend using exchanges with large scale and high consensus for trading. If conditions allow, consider using a cold wallet, and transfer when on-chain gas fees (transfer fees) are low.
I highly recommend Binance exchange: Click to register on Binance or enter referrer: 47678597
Or OKEX: Click to register on OKEX or enter referrer: 7nqx4
Cold wallet Ledger: https://shop.ledger.com/zh-CN?referral_code=4CAT5T1CRK0Z2
Thank you.
Dollar-Cost Averaging Amount#
If you are confident in cryptocurrency and see it as an investment rather than speculation, meaning you believe there is long-term development and the overall industry will not go to zero, then increase your dollar-cost averaging when prices are low and reduce it when prices are high to minimize emotional interference. It sounds easy, but when BTC really hits $20,000, ETH hits $1,500, and SOL hits $10, it is indeed very difficult to increase investment. Therefore, in this current wave, many have earned less; most people regret buying after losing in investments, and when prices rise, they regret buying too little.
For example, if we dollar-cost average $600 a month, we can divide it into several parts, say three parts: one part $200, and evenly purchase BTC, ETH, BNB. If we are optimistic about SOL, we can replace BNB, etc., and operate accordingly. When the coin index and greed index are both high, reduce the dollar-cost averaging amount, for example, from $600 to $300. If there are more promising projects, you can divide the amount into more parts, but it's best to choose targets that have potential and are worth holding for a long time. If you don't want to choose, just buy BTC.
Dollar-Cost Averaging Records#
You can use an Excel spreadsheet to record the overall amount invested each month and how much has already been invested, etc.
For specific profit calculations, I recommend two websites for tracking:
https://www.mytokencap.com/zh/
You can use an app to record, clearly writing down each transaction by coin type for easy tracking of overall profits.
Special Topic#
Monthly dollar-cost averaging articles will be written in the special topic: Cryptocurrency Dollar-Cost Averaging Special Topic