Bitcoin has been hit hard over the past two months. Despite trading at a new all-time high of roughly $64,000 per unit in mid-April, the currency has tanked and is currently trading for around $35,000, knocking nearly $30K off its price from two months ago. For some investors, however, the present circumstances are no big deal, and they are continuing to see their bitcoin earnings grow. One of these investors is Adam Traidman, the CEO and co-founder of the popular crypto BRD wallet.
Adam Traidman Suggests This Simple Pattern for Investing in BTC
Over the years, Traidman – given his unique position in the crypto space – has learned a thing or two about bitcoin’s volatility and knows that timing the market is a pointless step to take. Instead, he focuses more on dollar-cost averaging, and feels this has proven more beneficial in recent years.
The process of dollar-cost averaging, he says, is relatively simple. One invests a certain amount regularly in whatever asset they may deem appropriate. In this case, it is bitcoin. Instead of buying a whole lot of it at once, you invest a little each time throughout a certain time pattern. For one person, it may be ten dollars a week. For another, it may be $50 every two weeks. One needs to find the right pattern that they feel comfortable with.
Traidman says this is a great strategy primarily because it removes any emotion from the investing process. As it stands, when one buys stocks or certain assets, they are likely to feel somewhat nervous. It is never certain if one is making the right choice. They want to ensure they get the asset for the right price, and there are concerns that it could fall just as soon as they buy or that it could spike if they do not purchase in time.
Traidman says that buying a little each period no matter what the price of the asset is allows the person to feel far less stress when making their purchases. He comments:
Casual investors tend to buy into the hype cycle and sell when the losses become a reality. It is crazy illogical thinking, but it happens all the time. Why would people buy high and sell low? Well, they do not want to, but they sell out of fear.
Typically, this strategy is seen among traditional investment vehicles such as stocks, though Traidman believes applying it to crypto makes a lot more sense given how volatile the space can be. Bitcoin has seen so many drops in just the past few years alone that it can easily drive its investors to madness, and Traidman feels this strategy is a great way to help people be calmer about where their money is going.
Take the Emotion Out of the Equation!
He says:
Dollar-cost averaging ends up making sense in the long term.
