Survey: 59% of crypto investors use dollar-cost averaging as their primary investment strategy

By Kraken Learn team
9 min
Oct 7, 2024
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Intro to DCA strategy survey 📖

Dollar-cost averaging (DCA) is an investment strategy where an individual purchases a fixed amount of an asset, such as a cryptocurrency, at regular intervals over a period of time. 

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. 

But how many of these investors stick to their guns for the long-term and continue to invest in the space regardless of market conditions?

We dug a little deeper with a survey of 1,109 crypto investors to see how they actually respond to market fluctuations and whether they successfully avoid emotional decisions by using the DCA strategy.

Read on to see how crypto investors across different ages and income levels utilize the dollar-cost averaging strategy to consistently grow their crypto portfolio.

Key takeaways 🔑

  • Our survey found that the majority of crypto investors use DCA (59%) as their primary means of investing in the crypto ecosystem
  • Younger crypto investors prefer to take on more risk, with 50% of 18-29 year-olds opting to time the market rather than commit to DCA (41%). 
  • Investors making less than $100,000 are more likely to try timing the market and make adjustments to their crypto investment strategies than higher-income investors. 
  • Investors earning more than $100,000 are significantly more confident about their investment strategy and less likely to pivot than lower earners. 63% of investors above this threshold feel “very strongly” about their ability to stick to their plan despite market fluctuations. 
  • Almost three-quarters of crypto investors keep a closer eye on crypto markets than traditional markets.

Majority of crypto investors say DCA’s biggest advantage is hedging against market volatility 🏔️

While DCA is generally seen as a way to develop a consistent investment approach and manage emotional reactions to market changes, most crypto investors believe the DCA strategy plays a more important role. 

46.13% of crypto investors in our survey said that the most significant advantage of DCA is that it helps them hedge against market volatility — almost 13 points higher than the second-place benefit of supporting consistent investment habits. 

Overall, only 12% of respondents believe removing emotion from trading is DCA’s top benefit. Of all the age groups surveyed, this benefit of DCA was most popular among younger investors ages 18-29, where 22.77% of respondents ranked it as the most significant advantage. Of note, our survey also found that this group is also more likely to try and time the market rather than DCA’ing into the market than older generations. 

Similarly, investors making less than $50,000 a year also believe the most significant advantage of dollar-cost averaging is the ability to remove emotions from trading decisions.

Those making under $10,000 still appreciate DCA’s ability to protect against market volatility (28.95%), while 21.05% believe its ability to remove emotions from decision-making is the top value — more than higher-income investor respondents. 

Otherwise, the most significant benefit of dollar-cost averaging selected by investors earning less than $50,000 is that it encourages consistent investment habits.

Over the $50,000 threshold, the interest in reducing the impact of market volatility increases. Particularly for those earning $175,000-$199,000, of whom 66.96% believe reducing the impact of market volatility is the biggest advantage of DCA. 

Comparatively, just 23%-29% of investors earning less than $50,000 named reduced impacts of market volatility a top benefit. That’s a 43 point difference between the lower-income and higher-income investors surveyed.

This difference might indicate that lower-income investors need more support with investment decisions, including maintaining regular contributions and sticking to a trading decision without emotional influence.

A bar chart highlights DCA benefits according to crypto investors

Lower-income investors are the most likely to react emotionally 🔍

Our survey found that 59.13% of crypto investors dollar-cost average as their primary crypto investment strategy, while 30.19% try to time the market. However, these results can vary significantly by income. 

When we look at the most common investing strategy across different income levels, the results of our survey indicate that lower-income investors most often choose riskier strategies like trying to time the market. The results also indicate that these investors are more likely to react to market volatility by pivoting their investment strategy than higher income earning respondents. 

Here’s how this breaks down for those survey respondents earning less than $100,000:

  • $0-$9,000: 57.89% use DCA, 26.32% time the market
  • $10,000-$24,999: 30.77% use DCA, 50.77% time the market
  • $25,000-$49,999: 49.49% use DCA, 31.31% time the market
  • $50,000-$74,999: 43.48%% use DCA, 43.48% time the market
  • $75,000-$99,999: 55.56% use DCA, 31.48% time the market

Crypto investors earning over $150,000 prefer DCA strategies:

  • $150,000-$174,999: 66.67% use DCA, 14.79% time the market
  • $175,000-$200,000: 75% use DCA, 20.54% time the market
  • $200,000+: 77.70% use DCA, 17.48% time the market

It’s worth noting that these results are generally similar across both crypto and non-crypto investments. However, we did find that younger investors are still slightly more likely to try to time the market with cryptocurrencies than traditional assets. 

This divide in the primary investment strategy according to income is also visible when we ask how investors rank their ability to stick to a trading plan when markets fluctuate. 

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 $100K 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.

Considering the tradeoff between this financial need and increased risk, some crypto investors with lower incomes may be more likely to stop trading or cut their losses once they see things turn. Losses can end up being relatively more significant to them and their financial safety net may be smaller

Because the price of bitcoin can go up and down rapidly during periods of market volatility, investors across all income levels should consider their risks carefully and do their own research.

Only 8.13% of DCA crypto investors maintain their investment strategy when they face losses, so market fluctuations and narratives can directly affect most of this group’s investment decisions. People using other crypto investment strategies were more likely to stay the course during market turbulence, but how they pivot varies. 

A graphic highlights how crypto investors react to loss according to their income.

However, it’s also notable to see that lower- and mid-income crypto investors are far more likely to stick to their strategy when facing losses (though still at relatively low rates) compared to earners making more than $100,000. 

Meanwhile, more than half of crypto investors earning more than $100,000 stated that they had a “very strong” ability to  stick to a trading plan when facing market fluctuations.

A graphic highlights how crypto investors react to loss based on their crypto trading strategies.

Only 8.13% of DCA crypto investors maintain their investment strategy when they face losses, so market fluctuations and narratives can directly affect most of this group’s investment decisions. People using other crypto investment strategies were more likely to stay the course during market turbulence, but how they pivot varies. 

73.69% of crypto investors watch crypto market conditions more closely than traditional investors 👀

Regardless of investment strategy, investor age or income level, all eyes are on crypto markets. 

Over 55% of respondents say they check crypto markets significantly more than traditional markets. Less than 12% of crypto investors say they watch traditional markets more. 

Still, older investors aged 45+ keep the closest eye on markets. 66% of those aged 45-60 check crypto significantly more often than traditional investments compared to 33% of those ages 18-29. 

High earners are also more likely to watch crypto markets extra closely, while lower-income earners watch crypto markets less than average and have a slightly increased interest in traditional markets compared to other earners. Fewer than 5% of crypto investors earning over $125,000 check traditional investment markets more often than crypto markets.

DCA strategies benefit crypto and traditional investors 🤝

DCA strategies have numerous advantages, like reducing the stress of timing the market and offsetting emotional decision-making. 

These perks are part of why a majority of investors use a dollar cost averaging strategy while investing in both traditional and crypto assets. But it’s not perfect, and the increased risk for certain investors may still drive them to watch the market closely and pivot their strategies to manage volatility. 

Sources like Kraken track crypto prices and performance so you can make better-informed trading decisions when buying and selling highly liquid cryptocurrencies.

Start DCA'ing with Kraken

Dollar-cost averaging offers an easy way for people to constantly build their crypto portfolio.

Kraken allows clients to set up recurring buys on hundreds of different cryptocurrencies, so they can always accumulate coins regardless of the market’s conditions.

Start dollar cost averaging by setting up recurring buys with Kraken today.