"Virtual Assets Also Show Solid Benefits of Systematic Investment Plans"

[Asia Economy Reporter Ji Yeon-jin] It has been analyzed that systematic investment in virtual assets also yielded high returns.

According to a report published on the 4th by the virtual asset exchange Korbit (CEO Oh Se-jin), the company's research center categorized investors into four groups based on investment strategies and tracked return data from 2012 to 2021. This was to examine the effect of the 'DCA' strategy, an investment method that regularly purchases a specific asset over a certain period to lower the average purchase price.

First, Investor A buys Bitcoin worth $1,200 every year at the lowest Bitcoin price for 10 years. Investor B buys Bitcoin worth $100 every month on the 1st, regardless of market trends, for 10 years. Investor C makes split purchases of Bitcoin when the Google Trends search volume for 'Bitcoin' is highest during the year, and Investor D holds cash during the same period, assuming a risk-free return rate of 2%.

As a result, Investor A had the highest returns, followed by Investor B and Investor C. Jung Seok-moon, head of Korbit Research Center, said, "Although Investor A's group showed the highest returns and Sharpe ratio, in reality, no investor can perfectly time the market and enter it in advance," adding, "The DCA strategy of group B, which ranked second in returns and Sharpe ratio, is effective."

Director Jung stated, "The DCA strategy reduces the influence of cognitive biases that hinder rational investment decisions and is a practical strategy achievable by general investors," emphasizing, "Especially for loss-averse investors who feel the pain of losses more than the joy of gains, the DCA strategy is effective."

Since assets with high volatility increase the likelihood of poor investment decisions, the advantages of DCA are more pronounced in virtual assets than in stocks.