Dollar Cost Averaging

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Dollar Cost Averaging is nothing more than a method of investment focused on reducing the impact of volatility in assets. More specifically, crypto based assets, is what we will focus on today.

There are a lot of people who's methodology is nothing more than "buy low, sell high". The problem is that we don't know what the low is or what the high is. And who wants to wait forever for Bitcoin to hit an all time low? I know that I don't...

Instead what we do is focus our available investment across a range of coins and purchase accordingly. I always focus on what is essentially the top 10 coins, according to CoinGecko, plus a few specific others, and invest according to that.

First we need to figure out what coins we want to invest in. Looking at CoinGecko, we will take the top 10 coins and remove and "stable" coins or any coins that are pegged.

The top 10 coins at the time of this post are:

  • Bitcoin
  • Ethereum
  • Binance Coin
  • Tether
  • Cardano
  • Solana
  • XRP
  • Polkadot
  • Dogecoin
  • USD Coin

And we will remove Tether and USD Coin because they are supposed to be stable coins and not go up or down very much (they are supposed to be equal to 1 dollar the majority of the time). And if I want to invest in a coin, I want it to go up in value more than a penny here and there. So we will replace those coins with Hive, INDEX, and WORKERBEE.

Hive because it is the platform in which I do a majority of my blockchain efforts. INDEX because I see the long term value in the INDEX and the consistent improvements myself and @jongolson are making to it (and it pays out daily!). WORKERBEE because I want to continue to improve my stake and increase @clicktrackprofit witness position on Hive-Engine.

So in total we have 11 tokens. Now we need to break down our investment strategy. What I normally do is 50% CoinGecko coins and 50% Hive coins. We will start with Hive because it is easier.

  • INDEX - 70%
  • WORKERBEE - 20%
  • Hive - 10%

And for CoinGecko listed coins, I use the 24hr volume to determine amount invested:

  • Bitcoin - 28.4 Billion (25%)
  • Ethereum - 15.8 Billion (14%)
  • Binance Coin - 1.1 Billion (1%)
  • Cardano - 57.7 Billion (51%)
  • Solana - 2.3 Billion (2%)
  • XRP - 3.1 Billion (2%)
  • Polkadot - 1.1 Billion (1%)
  • Dogecoin - 3.2 Billion (3%)

I rounded all the volume and percentages for easy math. In total we have 99% accounted for, so I will add 1% to Bitcoin to get the 100%.

And now the easiest math of them all!! For every $100 I invest, this is how much I would invest in each coin:

  • HIVE Coins (50% or $50 total)
    • INDEX - $35
    • WORKERBEE - $10
    • Hive - $5
  • CoinGecko Coins (50% or $50 total)
    • Bitcoin - $13
    • Ethereum - $7
    • Binance Coin - $0.50
    • Cardano - $25.50
    • Solana - $1
    • XRP - $1
    • Polkadot - $0.50
    • Dogecoin - $1.50

This makes it really simple for me to invest consistently using the Dollar Cost Averaging method and allows me to not focus on current price of each Coin. At this point, I would rather amass as many Coins as possible instead of trying to flip coins consistently for pennies (because it is too time consuming and doesn't pay very well for the effort...)

I consistently adjust how much I am spending on each coin and which coins I buy by just looking at the current rankings and their volume. I have been using this method for a few years now and and well into the green on my investments.

If you want a good passive method of invest, I would highly recommend Dollar Cost Averaging instead of "Buy Low, Sell High", because it doesn't matter what the market is or looks like, I am always investing!

What method of investing do you use? How does it work for you?



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8 comments
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Thanks for sharing. This sounds like a great plan. I would not have thought of using CoinGecko to get volumes for the allocations. Brilliant. Currently I am working to build my Hive Platform portfolio but since I am retired, I do not have very much extra to invest. I am using time as my investment currency since that is how I can build my Hive portfolio.

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I tend to have price targets for most of my non-HIVE investments. Before entering, I generally have a plan and I make sure it's something I wouldn't mind holding long term. In the case of stocks, when I build a position, I generally like to sell a few options and collect some extra premium (covered calls or covered puts).

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