Dollar-Cost Averaging is an investment strategy where an investor regularly purchases a fixed dollar amount of a particular asset, regardless of its price. This systematic approach aims to reduce the impact of market volatility on the overall purchase price. By buying more units when prices are low and fewer when prices are high, the average cost per unit over time can be optimized.
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This strategy is widely applied in cryptocurrency markets to mitigate the effects of their inherent price fluctuations. It provides a disciplined method for accumulating digital assets without attempting to predict market peaks or troughs. While it does not guarantee profits, dollar-cost averaging can help investors reduce risk exposure over the long term, making it a favored approach for many entering the digital asset space.
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