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Crypto Glossary/Dollar Cost Averaging

Dollar Cost Averaging

A strategy that involves investing a fixed amount of money in an asset, over regular time intervals irrespective of price.

There is one simple rule of investing, buy low and sell high. However, it is difficult, if not impossible to perfectly time the market.

Dollar-cost averaging solves this problem as you invest a fixed amount of money in regular intervals irrespective of the price. When done over a long enough period of time, this strategy allows investors to catch market moves on both sides and accumulate an asset at a relatively better average cost than trying to risk it all in one instance.

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