Gate.io talks about asset allocation with you! How to accumulate wealth without fear of bull and bear markets by combining regular fixed-amount investment with HODL strategy

Binance released a blog post yesterday titled 'The Long Game of Cryptocurrency: Strategic Allocation of Digital Assets'. In addition to discussing Dollar-Cost Averaging (DCA) and HODLing, it also talks about how to combine these two strategies and practical execution and investment principles.

Dollar Cost Averaging, a lazy investment method, accumulates wealth in the long term

The volatility of asset prices in Cryptocurrency is amplified compared to traditional finance, which is why many people are afraid to invest in Cryptocurrency. After all, you don't want your hard-earned money to be halved in just a few days. However, Binance believes that there are still long-term investment opportunities in Cryptocurrency and points out that strategies such as Dollar Cost Averaging (DCA) and HODLing can effectively manage Cryptocurrency investments in the long run.

DCA (Dollar-Cost Averaging), also known as lazy investment method or regular fixed investment, is one of the most widely advocated investment methods on the market. Assuming investing 100,000 MOP into BTC every month, buying four coins at a price of 25,000 in the first month, buying two coins at a price of 50,000 in the second month, and buying one coin at a price of 100,000 in the third month. At this point, with a cost of 300,000, you own seven BTC, with an average cost of over 40,000. Of course, this is the case when the price rises, but in practice, DCA can smooth out overall costs while accumulating assets.

Binance summarizes the advantages of DCA, including reducing asset volatility (as we say, the curve is relatively smooth), and DCA does not require advanced trading knowledge, with lower threshold. Finally, everyone knows that investment is an operation against human nature, and DCA can overcome emotional biases.

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HODLing is the so-called long-term holding, but this strategy is not suitable for everyone. The most successful value storage of Bitcoin and the first Ethereum that introduced smart contracts are the best spokespersons for HODLing. However, long-term holding may still bring risks, especially for early or low-market-cap tokens, and it may be wiser to stop loss early, as Bitcoin and Ethereum are still a few successful cases from a macro perspective. The key to successful long-term holding is thorough research (read more chain news) and a firm belief in the long-term potential of the assets.

Techniques for implementing HODLing

Research Basis: If you decide to hold for the long term, choose assets with a strong ecosystem, potential for large-scale adoption, and an active developer community. Track its performance since its inception to assess whether the asset is worth holding for ten years or longer.

Patience pays off: set long-term goals (at least 3-5 years) and hold firm in selling during market downturns, unless investment thesis changes.

Secure Storage: Store Cryptocurrency in a cold wallet for maximum security.

Diversification of assets, Dollar Cost Averaging combined with HODLing

Dollar Cost Averaging (DCA) and HODLing can be combined as a strategy. From a macro perspective, long-term investment in Crypto Assets is a psychological challenge. Because fear, uncertainty, and doubt (FUD) may lead to panic selling, and fear of missing out (FOMO) may trap investors at high points.

How to stay stable:

Focus on long-term goals: Remember the reasons for investing in cryptocurrency. Is it for retirement savings? Investment in future long-term plans? Keep these goals in mind and ignore short-term noise.

Less screen time: Constantly checking prices can exacerbate anxiety. Instead, set specific times for portfolio review, such as monthly or quarterly checks.

Milestone celebration: Recognize your own progress. For example, completing a year of continuous DCA is a commendable achievement.

Finally, diversification is also very important. Do not invest all your funds in a single cryptocurrency. A balanced investment portfolio may include BTC (store of value), ETH (smart contracts), and promising small-cap coins like SOL and XRP.

Although Binance is a centralized exchange, it still emphasizes that platform diversification is key, spreading assets across multiple exchanges to minimize the probability of a single point of failure. Another point is to diversify between hot wallets (regular use) and cold wallets (asset storage).

Finally, there is hedging technique:

Stablecoin: Allocate a portion of the investment portfolio to stablecoins such as USDT or FDUSD to hedge against a sluggish market.

Staking and Liquidity Mining: Earn income by staking assets or participating in liquidity mining protocols.

Insurance: Some platforms offer insurance products to prevent exchange hacks or smart contract failures.

This article talks about asset allocation with Binance! How to be fearless in the bull and bear markets with regular fixed investment combined with HODL strategy, accumulating wealth first appeared on Chain News ABMedia.