The Smartest way to Invest in crypto currency in Nigeria: The Art of Dollar Cost Averaging

Imagine contemplating an investment in the mighty Bitcoin or the enchanting Ethereum in Nigeria. You scrutinize the coin's price, witness an all-time high, explore the year-long trading graph, envision potential profits, and the exchange rate to a naira, yet the elusive perfect moment to invest evades you. You expand the graph to see the one-year trading graph and you see that if you would have invested $1,200 you would have made $20,000 in profit but like usual you still don't invest and you figure you might wait for the next low, especially since you've already gotten dopamine high of thinking how rich you could have been if you had invested the $1,200. A few weeks later you check it and you go dang, the price is super low right now; "Maybe the project isn't going anywhere". Then a few more weeks of this passed and the price has gone up again, then you enter decision fatigue, and the investment remains in limbo. In the realm of intelligent investing, a method shines and have come to save the day. The simple method is called Dollar Cost Averaging.

Dollar Cost Averaging (DCA) is a time-tested investment approach that transcends traditional boundaries. Instead of attempting to time the market's highs and lows, DCA involves consistent investments at regular intervals. The beauty lies in embracing both peaks and valleys, curbing the influence of emotional highs and lows. Whether it's days, weeks, or months, DCA ensures a steady commitment to your investment plan. This simply means instead of waiting for the perfect moment to buy a lump sum of crypto, you would put in certain amounts at regular intervals. when it comes to the mathematically smartest way to invest in a project that you believe in long term, the solution is simple, you should average out your investment and do something called dollar cost averaging. The time period of the art of dollar cost averaging can be days, weeks, or even months. For example let's say you wanted to get into bitcoin. Instead of looking at the price and letting your emotions decide, you instead agree to yourself that you'll put in $100 each month. Now of course, some months would be higher and some would be lower, but beating your emotions is exactly what the dollar cost averaging method is trying to achieve. You're averaging out your investments so that over time you are buying into the stock or crypto but aren't affected by super high points or super low points as much as if you just invested a lump sum.

Reflecting on personal experiences, a monthly investment of $20 into promising cryptocurrencies yielded substantial portfolio growth. The commitment, regardless of market fluctuations, proved rewarding. We started sometimes in 2017, myself my aunt and my cousin began putting in $20 a month each into a few different cryptocurrencies that we thought were interesting. It didn't matter if the project was going well or if it was going bad, i still put in my $20 and so did the rest of the members of my family. Well, jump forward a year and our portfolios are huge, at least when you compare them to the stock market. This recorded success is not because we were some great investor predicting the next big boom but it's because we stuck to our plan of investing in certain projects that we believed in and they did well over time. looking back, we actually bought quite a bit of ethereum at around $200 which has over 10xed its price. So now that $20 that i invested is worth over two hundred dollars.

Another time that i have dollar cost averaged was a few years ago. I began putting five hundred dollars into my IRA account as a form of retirement. Being self-employed, i knew that i had to start early since it's really easy to go every month without committing due to youthful exuberance. Well, five hundred dollars a month works perfectly for me as then when a dollar was still equal to 300 Naira. As at then, the yearly limit of the contributions was six thousand dollars, but fast-forward 14 months, my portfolio has grown to more than thirty thousand dollars just by investing in a simple index fund. In fact, all of this is done automatically on Luno before the government started frowning against crypto currency.

While lump-sum investments during market dips can maximize gains, dollar cost averaging (DCA) has a proven track record of averting major losses. Setting up automatic monthly investments diminishes the psychological barrier to investing, providing a stress-free strategy that aligns with long-term goals. Comparing strategies, DCA competes closely with buying the dip, but the slight advantage of the latter may not warrant constant price monitoring. You could probably spend the time you use in monitoring prices on working on a hobby that you enjoy, or even spending extra hours at your job to give you more money to invest. Either way, the smartest way to invest is to have a plan. Many investors rely on their emotions at the time that they either buy or sell, but in reality, the best investors have plans, maybe something like "I am going to buy any dip that is more than twenty percent with the hundred thousand naira that i've saved up, or something like "i'm going to spend 20,000 thousand naira a month on this coin no matter what the price is. Both of these methods have been affected for a ton of investors.

Embark on the journey of DCA by determining an affordable monthly investment amount. Whether it's $5 a day, ₦20,000 a week, or $1,000 a month, consistency is key. Consider leveraging centralized exchanges like Coinbase or Binance, offering DCA options to automate your investment journey. Pay attention to associated fees, with platforms like Coinbase reducing fees for larger investments.

The initial investment is the threshold to a world of financial growth. Committing to the plan is the hardest part, as emotions sway amidst fluctuating market conditions. Utilize exchange programs that facilitate DCA, enabling scheduled investments without constant manual intervention. Remember, investing is a journey, not a race.

In conclusion, as you navigate the complexities of the cryptocurrency realm, embrace Dollar Cost Averaging as your compass. Whether you're a novice investor or a seasoned pro, the simplicity and effectiveness of DCA can lead to financial success. Take action, embark on this journey, and let your investments flourish. Don't let emotions dictate your financial destiny; instead, let a well-crafted plan guide you toward prosperity.