Crypto Market has fallen to more than half of its all-time high value and it is still not showing any positive come back, Many of the small and big investors are tensed and under big confusion:-
Q1. What to do in this Scenario?
Q2.Is it a right time to average-out or average down to come up quickly?
Q3. Holding in crypto in these days will take how much time?
Q4. Is it market correction in crypto?
In this Article we will discuss about the investment strategy which can work-out to deal in this market fall, Average out means investing additional amounts or repurchase the crypto if it declines significantly in price after the original investment is made.
ü This can help the investor to bring down the average cost of the crypto and come out from the lost in short term.
ü It will benefits more to the investor who have the long term investment strategy.
Averaging down will be consider as a cost-effective approach to wealth & investment accumulation.
Benefits of Averaging out
The main benefit of averaging down any crypto is that an investor can lower down the actual buying cost of a particular crypto in bad situation.
For Example:-
If we purchased Crypto “A” 100 units @ $10 buying price
Buying price X Number of Units = Total Investment (+fees)
100 unit x $(10) = $1000
Spouse market is moved down 10% so value of Investment comes down to:
100 Units X $ (9) = $ 900 (-10% down)
Now the investor took the decision to average-out crypto “A”
He purchased 100 more units here:
100 unit x $(9) = $900 (New Purchase)
100 unit x $(10) = $1000 (Old Purchase)
Now he has 200 Units in $1900 so his average buying cost come down to
Total Investment/ Units which come: - 1900/200 = $9.5 (He covered up 5% gap)
Now if Market move upside 10% he will be in 5% profit, otherwise in old situation he might be in no profit & no loss situation. This means he needs to wait more for gain profit but average down at right time took him in the profit very quickly.
Disadvantages of Averaging out:-
· Before average out need to study the market situation very carefully.
· Study the news & current affairs & should take financial advice before investment & average –out.
· Some target need to be set for average, means there is no need to average down on small up-downs.
· Need to study & access the fundamentals for particular market.
Summary:-
In the conclusion we can say that right decision at right time will be more beneficial than a long wait. So average out is beneficial strategy to come- out quickly from bad situation. But it must require complete study & good analysis of the market situation.
Note: - I the last I would like to say to all the reader that I am not a financial advisory, please make your own investment decision at your own risk.
Thanks to all the reader, seeking your advice & suggestion to improve upon my work.
Thank you Very much
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