Kraken Survey Reveals Crypto Investors Favor Dollar-Cost Averaging Strategy

Kraken Survey Reveals Crypto Investors Favor Dollar-Cost Averaging Strategy

A recent survey conducted by the cryptocurrency exchange Kraken indicates that a significant majority of crypto investors prefer the dollar-cost averaging (DCA) investment strategy when purchasing digital assets. The survey published on October 7 involved 1,109 respondents and found that 83.5% of investors have utilized DCA at some point, with 59% currently employing it as their primary investment method.

Dollar-cost averaging is an investment approach where individuals purchase a fixed dollar amount of a cryptocurrency at regular intervals regardless of price fluctuations. This method is designed to help investors mitigate the impact of short-term price swings, which are common in the volatile cryptocurrency market. According to Kraken's research, 46% of respondents believe that DCA's primary advantage lies in its ability to hedge against market volatility.

The survey also revealed insights into how DCA's appeal varies based on income levels. For investors earning less than $50,000 annually, the most significant benefit of DCA was its encouragement of disciplined investment habits. In contrast, those with annual incomes exceeding $50,000, particularly those in the $175,000 to $199,000 range, prioritized DCA for its effectiveness in reducing the impact of market fluctuations. Nearly 70% of these higher-income investors considered this feature the most significant advantage of the strategy.

Despite the broad adoption of DCA among crypto investors, only about 8% maintained this strategy during market downturns. Interestingly, the survey noted that investors who employed alternative strategies were more likely to remain consistent during periods of market losses. Researchers at Kraken observed a correlation between income levels and adherence to investment strategies, stating, “The more an investor earns, the more confident they are about sticking to their investment strategy.” Approximately 63% of high-income investors, especially those earning over $100,000 annually, reported a “very strong” ability to maintain their trading plans amid market volatility.

The survey also highlighted generational differences in investment strategies. Younger investors aged 18 to 29 exhibited a greater inclination toward riskier strategies, with half of them attempting to time the market. Conversely, older investors aged over 45 were more diligent in monitoring crypto markets, with two-thirds of them tracking market movements more frequently than their younger counterparts.

In a strategic move to expand its influence in Europe, Kraken recently acquired Coin Meester B.V. (BCM), one of the oldest registered crypto broker firms in the Netherlands. Over the past two years, Kraken has been actively broadening its operations across Europe, offering Virtual Asset Service Provider (VASP) services either directly or through partnerships in various countries, including Germany, Spain, Italy, Belgium, Ireland, France, Poland, and the Netherlands.

Kraken has also been responding to regulatory challenges, notably from the United States Securities and Exchange Commission (SEC), which alleges that several digital assets offered by the exchange should be classified as unregistered securities. In its defense, Kraken has denied these allegations, arguing that the assets in question do not meet the legal criteria to be considered securities.