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 concerns about the investment and only mined without any serious investments or 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 a lot of profits 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 approach, he had the idea of investing in the top 100 cryptocurrencies multiple times. Although my investment amount is not as high as his, I have also invested in many of the same cryptocurrencies. 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 focus on large market cap, long-standing, and high consensus cryptocurrencies.
Due to my limited funds, I also referred to Ahr999's coin index and sentiment index. When BTC reached $60,000 twice, if I had followed the extreme greed indicated by the sentiment index and sold based on my intuition, I would not have regretted it later, even if the amount was small.
Dollar-Cost Averaging Method#
After the FTX incident, I recommend using large-scale, high-consensus exchanges for trading. If possible, consider using a cold wallet and transfer funds when on-chain gas fees (transfer fees) are low.
I highly recommend Binance: 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 cryptocurrencies and see them 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 decrease it when prices are high to reduce 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, and most people regret buying after losing in investments, and regret buying less when prices rise.
For example, if we dollar-cost average $600 a month, we can divide it into several parts, say three parts: one part $200, and average purchases of BTC, ETH, and 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#
Overall, you can directly use an Excel spreadsheet to record how much you invest each month and how much you have already 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 each transaction by cryptocurrency, making it easy to see overall profits.
Special Topic#
Monthly dollar-cost averaging articles will be written in the special topic: Cryptocurrency Dollar-Cost Averaging Special Topic